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Baker, Ray Stannard 


The new industrial unrest 

I I3C6- 

Garden City, N.Y 










Baker, Rajr Stannard, 1870- 

The new industrial unrest: reasons and remedies, by Ray 
Stannard Baker. Garden City, New York, Doubleday, Page 
& company, 1920. 

vl, 231. cli p. 21- 

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The New Industrial Crisis .... 
The Industrial Crisis as it Appears from 

above to the Capitalist-Employer . 
The Industrial Crisis as it Appears from 

below to the Worker ..... 27 
The Imputed Causes of the Unrest 
The Real Causes of the Unrest . 

The Massed Forces behind the Industrial 
Conflict — Organized Labor 

The Massed Forces behind the Industrial 
Conflict-— Organized Capital . 

Awakening of the Public to the Industrial 

Approaches to a Solution of the Problem— 
by Americanization, as suggested by the 

Approaches to a Solution of the Problem 

by Political Action, as suggested by the 
Workers. The New Labor Party . 

The Genius of Mechanism and the Soul of 
Man. The Spiritual Aspect of the Prob- 

Welfare Work as a Solution of the Problem. 
How it is Regarded by both Employers 
and Workers . . . . . . 136 -* 




78 '^ 








XIII. The New Shop-Council System as applied 

in a Typical Small Industry — The 
Dutchess Bleachery at Wappingers Falls, 

J^ civ X Oa J£ •••«.«« 

XIV. Development of the Shop-Council System in 

America. Method of Organization. The 
Movement, in England and Germany 

XV. The Shop-Council System as Applied to the 
Men's Clothing Industry of America and 
Canada — The History, Principles and 
Structure of the Development , 

XVI. A Critical Examination of the Shop-Council 
System in the Clothing Industry. How 
does it Really Work.? What are its Ex- 
cellencies and Limitations? . . 

XVII. Foundations of the New Co-operative 
Movement in Industry: the new Profes- 
sion of Management, and the Lahor 

XVIII. Autocracy and Democracy Struggle for In- 
dustrial Control. Some Results of the 
New Co-operative Experiments 













The New Industkial Ckisis 

WE have recently emerged from 
two of the greatest strikes the coun- 
try ever saw: the steel strike and 
the coal strike. In both cases the losses in 
wages, in production, in earnings, were stupen- 
dous, and in the case of the coal strike the 
country was brought close to the brink of 

We have indeed emerged from both strikes— 
but with nothing really settled. Large num- 
bers of the men went back to work dissatisfied. 
There was no compromise and apparently no 
spirit of compromise. Judge Gary stands just 
wihere he did before the strike began: so does Mr. 
Gompers: so do Mr. Fitzpatrick and Mr. Lewis. 
In the coal strike both operators and miners are 
sullen. The Pennsylvania operators were as 
unwilling to accept the President's proposal for 
a temporary cessation of hostilities as were the 
lllmois miners. 


A West Virginia leader, commenting upon 
the discontent among the miners in his state, 
predicted another strike within a few months; 
and the twenty-four presidents of unions con- 
nected with the steel strike have expressed their 
determination to go forward with the struggle 
to organize the workers in the steel industry. 

Leaders in both camps refer in clearer terms 
than ever before to what they seem to regard 
as irreconcilable diflferences of view. Judge 
Gary was heartily cheered by 1,500 members of 
the American Iron and Steel Institute, an 
organization of the iron and steel masters of 
the nation, when he declared his determination 
not to deal with representatives of labour 

" This is the great question confronting the 
American people, and, in fact, the world 
public," he said. 

During the progress of the strike, which 
began in September, 1919, Judge Gary re- 
ceived hundreds of letters and telegrams from 
employers and employers' associations in many 
parts of the country supporting his position. 

On the other hand labour is taking a stronger 
stand than ever before. On December 13, 1919, 
the heads of 119 powerful national unions held 
a conference at Washington, and adopted a new 
"bill of rights." They reiterated their deter- 


mination to exercise the right of organization for 
all industries, the right of collective bargaining, 
the right of "being masters of themselves." 

" Labour," they said, " must be and is militant 
in the struggle to combat the sinister influences 
and tendencies. Labour will not permit a reduc- 
tion in the standard of living. It will not con- 
sent to reaction toward autocratic control." 

This represents the view of the conservative 
wing of the labour movement, headed by Mr. 
Gompers. The more radical wing of the 
workers — and I do not mean by this the extreme 
revolutionary fringe — met on November 22, 
1919, in convention at Chicago and organized 
a new Labour Party to carry the whole struggle 
into the field of pohtics — a movement which 
will be treated in another chapter. 

" Labour," says an official report of this con- 
vention, " has hurled its challenge to the business 
and financial interests that control the American 
government to-day. The battle is on." 

This sense that " the battle is on " is to be 
found among certain groups in both camps. 
I heard a great manufacturer arguing that 
the employers were better prepared at this 
time to fight than they ever would be again. 
They had surpluses from prosperous years: 
and a strike now would " cost only about half 
as much as it would in an ordinary year " on 





account of savings in income and excess profit 

On the other hand I heard several labour 
leaders argue that they were in a better position 
to fight now than later, owing to the national 
shortage of labour. There was now no surplus 
from which employers could draw strike- 

Reference is here made to the position of two 
large sections of the labour movement: but there 
exist, as every one knows, still more radical 
groups, smaller but noisier, which are for various 
kinds of " direct action." There was never be- 
fore in America such a number of revolutionary 
groups, or so widespread a propaganda of radi- 

These conditions are not set forth with any 
desire to be alarmist. There are strong counter- 
currents and reconstructive movements among 
both employers and employees — which will be 
treated in later chapters — but we ought above 
everything to face the situation honestly and 
frankly. It is only by recognizing the problem 
which confronts us that we shall be able to 
deal with it. 

Another disturbing factor in the situation-in 
some ways the most disturbing of all— has been 
the impotency of the government in meeting 
these industrial crises. Both sides seem equally 


critical, if not contemptuous, of Congress; both 
sides have refused to accede to the requests of 
the President. The steel workers would not 
delay their strike even for two weeks until the 
President's industrial commission could sit. On 
the other hand Judge Gary refused the Presi- 
dent's request for a conference with the labour 

In the case of the coal strike the govern- 
ment through the Attorney CJeneral announced 
that " the full power of the government " would 
be used to save the country from a fuel famine. 
Nevertheless coal was not mined: factories were 
closed, railroad transportation was crippled: the 
country suflPered acutely. Coal strike leaders 
were enjoined by the federal court: but the 
injunction produced no coal. Congress investi- 
gated the steel strike: it had not the slightest 
effect upon the resumption in the production of 
steel. The recent cessation of the coal strike was 
no settlement at all: only a postponement of the 

The effort of the government to get the 
parties to the controversy together to formulate 
some general plan of compromise — at the Octo- 
ber Industrial Conference — failed utterly. A 
new Commission of Seventeen appointed by Mr. 
Wilson was later summoned to Washington, 
to devise some plan whereby in his own words, 

■I ^m»lM 


1,1 I 


"the public will not suffer at the hands of 
either class." 

This commission was made up of a very able 
and distinguished group of public men, includ- 
ing several former governors and cabinet secre- 
taries. Mr. Herbert Hoover was a member. 
And yet before, the commission had its first 
meeting the labour groups had expressed their 
disapproval of it because it had no representa- 
tive of labour upon it. 

The labour situation upon the railroads has 
also been in a highly unstable condition, with the 
breach widening between Congress and the 
powerful railroad brotherhoods. The railroad 
unions were opposed to the plans for re- 
turning the railroads to private control: and 
have been upon the point, several times, of 

In this crisis the public, which is the principal 
sufferer, grows confused and impatient. Pro- 
duction suffers at a time when abundant pro- 
duction, not only for America but for the whole 
world, was never so necessary. Prices mount 
higher and higher. A strong tendency exists 
to deal with problems of immense complexity 
and difficulty either by hasty legislation, or crude 

Never was there such need for accurate in- 
formation, and patient action. A vast mass of 



detail regarding strikes and industrial disturb- 
ances is daily presented to us — detail which few 
ordinary busy human beings can possibly piece 
into a picture of the whole scene. We cannot 
see the forest for the trees: nor the news for the 
headlines. One of the most conscientious editors 
in the country told me that he did not know 
until some time after the steel strike began that 
the twelve-hour day and the seven-day week were 
so common still in the steel industry: and that 
it was a week or more after the coal strike began 
that he found out that the demand for a five- 
day week of six hours a day — which seemed so 
astounding and unreasonable — ^would, if it were 
introduced, actually mean a slightly longer 
average working week than the miners of 
America have had during the past few years. 
Over and over again, in examining this un- 
stable industrial situation, one feels as he did at 
Paris, during the Peace Conference. There is 
the same "slump" from the high spirit and 
noble idealism which characterized the war 
period. Never was there such unity between 
labour and capital as there was in America 
during the war, never such a spirit of co- 
operation, never so little regard for profit, never 
so great a concern for generous service and high 
production. It was the marvel of the whole 
world. I was in England during the spring of 


1918 and know how widely the British press 
published the records made by us in shipbuilding 
and other industries through the co-operation 
of employers and their workmen. But the mo- 
ment the war ceased the same disintegration took 
place in industrial relationships in America as 
we saw at Paris between the nations. The 
bottom fell out of ideahsm! The great moment 
had passed, there had been no miracle, we were 
back at the old controversies, selfish interests 
were again rampant, and the struggle was 
sharper than ever before. 

We are passing through much the same 
psychological process in getting a new under- 
standing between labour and capital as we are 
in getting a League of Nations. Much the 
same forces are at work: the same obstinate 
reactionary elements, the same unreasonable 
radicahsm. We are trembling upon the thin 
edge, in both problems, between organization 
and anarchy. Which way are we going? Is it 
to be confusion and anarchy and war— or is it 
to be good order, and organization, and co- 

In both cases almost every one agrees that we 
cannot go back to the old. But can we go on 
to the new? Are we brave enough? Are we 
clear-sighted enough? Our record, so far, re- 
garding future international relationships, is not 



reassuring. Will we do better with our equally 
difficult internal problems? We know, or think 
we know, pretty well what to do in interna- 
tional affairs. Ahnost every one agrees to some 
land of a League of Nations. Are we anywhere 
nearly as clear about the industrial problem? 

The prime difficulty in this crisis, as it was in 
Paris, is the want of proper publicity. The 
great American public does not understand the 

I felt over and over again at Paris that if 
one who had been there could sit down with a 
group of his neighbours and explain the whole 
situation, present the difficulties involved, de- 
scribe the dangers of drifting -without a con- 
structive purpose, he could show them why, even 
though the treaty was defective in many ways, 
it was profoundly necessary to get some organi- 
zation at work, some league in being to steady 
the world. 

I have had exactly the same conviction regard- 
ing the present industrial situation in America. 
It is based upon the same solid faith in the 
essential good sense of the American people. 
If they can only see the situation, as it presents 
itself in some of the great industrial centres, 
where strikes have been raging; if they can only 
know what the issues really are as interpreted 
by leaders on both sides of the great con- 


troversy; if they can only understand how in- 
tensely human the problems are, how full of 
the common stuff of life; if they can be shown 
where the truly reconstructive experimentation is 
going on and who are the thoughtful leaders 
on both sides,— if the American people can see 
and know and understand these things they will 
decide aright regarding them. 

It is with these conditions, and this need, in 
view, that the following chapters have been writ- 
ten—to present a survey, for the general reader, 
of the present industrial crisis, and the various 
reconstructive experiments now under way to 
meet it. 



The Industkial Crisis as it Appears to the 


IT is important, in approaching the prob- 
lem of industrial unrest which now con- 
fronts America, to understand first how it 
looks from above to the employer. In order to 
present this point of view clearly I am using 
the explanatory example of Gary, Indiana, one 
of the centres of the recent steel strike. In the 
following chapter I shall show how the same 
conditions appear to the workers. 

It is much easier to get at the point of view 
of the employer in the steel industry than it is 
to get at the point of view of the workers, for 
it is quite definitely the expression of one man 
—Judge Gary, the head of the United States 
Steel Corporation. It is a clear-cut, far-sighted, 
logically-expressed point of view, whereas the 
voice of the workers is confused and vague: a 
multitudinous murmur, as diverse as Babel, with 
as many opinions as a town-meeting. Be as 
conscientious as you like in making your in- 
quiries and you are never quite sure you have 
got it all. Judge Gary knows exactly what 




he wants: the workers are profoundly restless, 
without any one clear idea of what they want. 
Not only ignorance and foreignness but real 
differences of view divide and confuse them. 
Judge Gary's position is based upon experience 
and tradition: but the workers want something 
new, they are pressing forward into an undis- 
covered country. Judge Gary, representing the 
group having power and place, desires security: 
the workers, having neither, want change. 

There are, indeed, other voices, and powerful 
counter-currents among employers in American 
industry—even in the steel industry as I shall 
show later. John D. Rockefeller, Jr., and 
Charles M. Schwab are far from seeing eye to 
eye with Judge Gary. Nevertheless in the re- 
cent controversy Judge Gary was the type- 
defender, the accepted spokesman, of the entire 
industry. No other important witness repre- 
senting the employing side of the steel industry 
was heard by the Senate Committee. His stand 
was supported by the Iron and Steel Institute, 
which represents the entire steel industry in 
America. He was conmiended for his position 
by J. P. Morgan, the most powerful financier 
in America. Even some of the strong men in 
the steel industry who differed sharply with 
Judge Gary in regard to his policies or prac- 
tices, came to his support in this emergency. 


I have a copy of a letter from a steel master 
connected with an independent company, in 
which he says: 

"At the greatest personal sacrifice, both in 
friendship and in money, for the past twenty- 
five years, I have waged an unceasing warfare 
against the steel corporation on the question of 
the seven-day week, the twelve-hour day, and 
the autocratic methods of dealing with workmen, 
but in the present struggle my sympathies are 
entirely with Judge Gary." 

Boiled down, the position of this steel master 
is that the recent conflict was really a revolu- 
tionary struggle for the control of the steel 
industry on the part of organized labour: he 
was, therefore, with Judge Gary. Now that the 
employers have won the strike he is for begin- 
ning a harder fight than ever against what he 
calls " these relics of barbarism "—meaning the 
twelve-hour day, the seven-day week, and the 
refusal to permit workmen to organize and 
bargain collectively. Indeed, in the company he 
represents, the men have been encouraged to 
form shop committees and to co-operate with the 

Judge Gary's leadership was accepted by the 
entire steel industry not alone because of the 
enormous power of the United States Steel 
Corporation— the general policies of which must 


and do set the pace for the entire steel industry 
in America— but because of his sheer ability. 
It is not for nothing that he is at the head of 
the greatest business corporation in the world, 
with property worth $2,250,000,000 (his own 
figures) and having 270,000 employees. He 
not only has this enormous power, and is con- 
scious of having it, but he knows with pene- 
trating clearness what he wants to do with it. 
" While I have a good deal of authority and 
power," he told the Senate Committee, " I use 
the same very sparingly, I am in the habit of 

No one who touches the steel industry at any 
point fails to become conscious of this pervasive 
authority. Though the power-house may be 
distant, no one who makes a contact anywhere, 
fails to get a shock. I had such an experience 
myself— which I tell in no spirit whatever of 
criticism, but merely to illuminate the point I 
am making. When I went to the city of Gary 
to look into the strike situation I was as anxious 
to understand the point of view of the manage- 
ment as I was that of the workers. So I asked 
quite directly if I might see the mills and talk 
with some of the superintendents and foremen. 
They seemed astonished : and referred me to the 
headquarters of the subsidiary corporation at 
Chicago. So I went there: and found that no 


observer had been allowed to enter the mills 
since the strike began: and that it was impos- 
sible for any one to talk about the situation with- 
out Judge Gary's personal permission. 

" But how am I going to get your point of 
view? Judge Gary has complained that in- 
vestigators present only the workers' side. How 
can I get your side if I can see nothing, and no 
one will talk to me?" 

I told what I was trying to do and what for. 
Judge Gary was reached by long-distance tele- 
phone in New York— and I was enabled, then, 
to talk with the representatives of the corpora- 
tion at Chicago and at Gary, and to visit the 

But to a remarkable degree these men I talked 
with, and very able men they are, echoed Judge 
Gary's views. They would give facts, but would 
express no opinions whatever of their own. It 
is a wonderfully disciplined organization that 
Judge Gary has created. It speaks as one man. 

As to the attitude of the corporation toward 
labour— and I am trying now to exhibit the 
industry fairly as it looks from above, — one of 
the foremen at Gary seemed to me to strike a 
kind of keynote: 

"Judge Gary," he said, "knows far better 
what is good for these workingmen, mostly igno- 
rant foreigners, than they know themselves." 

, T' 




Let me develop this a little further from 
Judge Gary's own testimony before the Senate 
Committee. As I said, he knows his power. 

I recognize," he testified, " that the power 
of concentrated capital necessarily involves the 
power to do more or less harm. I recognize the 
tact personally that concentrated capital has the 
advantage over a single individual, if the con- 
centrated capital is in the hands of dishonest and 
unfair men." 

This point of view leads directly to the very 
heart of Judge Gary's attitude toward labour. 
Kecognizmg the power of concentrated capital 
for good or evil, he desires to do good, as he 
sees the good. Absolute power is to remain in 
the hands of the employer-but the employer 
must use it wisely and generously. AD his utter- 
ances—and like any man who believes honestly 
and earnestly in what he says, he has been a 
tree talker,— all his utterances, and his testimony 
before the Senate Committee, resound with this 
Cloctnne. j /|-'*'''^'^''ii •-• 

"The only way of combating and overcoming 
that -the " wave of unrest in certain loca- 
tions, he said to the presidents of the subsidiary 
companies of the Um'ted States Steel Corpora- 
tion on January 21, 1919^" is for the employers, 
the capitahsts, those having the highest education, 
the greatest power and influence, to so manage 




their own affairs that there will be left no just 
ground for criticism." 

A little later in the same address he discloses 
vividly his whole policy toward the workers. 
This should be read carefully: 

** Make the Steel Corporation a good place for 
them (the workers) to work and live. Don't 
let the families go hungry or cold; give them 
playgrounds and parks and schools and churches, 
pure water to drink, every opportunity to keep 
clean, places of enjoyment, rest and recreation: 
treating the whole thing as a business proposi- 
tion; drawing the line so that you are just and 
generous and yet at the same time keeping your 
position and permitting others to keep theirs, 
retaining the control and management of your 
affairs, keeping the whole thing in your own 
hands, but nevertheless with due consideration 
to the rights and interests of all others, who may 
be affected by your management." J 

This is the very bony structure of his philos- 
ophy: and Judge Gary is one of the rare men 
who has tried to practise all he preaches. The 
Steel Corporation has spent millions of dollars 
in various forms of welfare work— forms so in- 
teresting and so significant in many ways, — the 
prevention of accidents, the pension system, and 
the encouragement of stock ownership by the 
workers— that I shall enlarge upon them in 


whole thing as a business proposition." He told 
the students of Trinity College in June, 1919, 
that " It pays big, in doUars and cents, for the 
employer to maintain working conditions which 
are beneficial to the health and disposition of the 

He has also adhered from the beginmng with 
smgleness of purpose to the principle he lays 
down for his subsidiary presidents of " keeping 
the whole thing in their own hands." 

This principle forms, indeed, the basis of his 
attitude toward unionism in his plants and ex- 
plains his refusal to meet or deal upon any terms 
with representatives of organized labour. His 
logic is clear. If once it is admitted that 
unionized workmen may have any say regarding 
their conditions, the whole fabric of his philos- 
ophy begins to crumble. Judge Gary is not a 
weak man, and not muddle-headed: he saw the 
issue from the very beginning, and has never 
swerved m his course. He has the immense 
advantage, as a leader, of a perfectly clear and 
logical position,— and one concerning which he is 
absolutely sure of himself. He believes it as one 
beheves a religious dogma. He believes that if 
you let unionism begin anywhere, it will mean 
more and more power to the vorkers and finally 
the " closed shop." It is nothing to him that the 




Strike leaders and Mr. Gompers declare that the 
strike is not for a " closed shop "—he will not 
have even the camel's head in the tent. To him 
such a change in the tried system which he 
knows, such jST division of control even in one 
department of the industry, not only threatens 
the power of the capitalist-employer, but makes 
for confusion and lowered production. He cites 
the English situation as an example of this and 
bids us beware of it. So he is against the whole 
movement, root and branch : for it is to him the 
beginning of revolution.^] t i?i/a,ii|fiffi«} 

The corollary of his principles, of course, is 
exactly what his foremen at Gary told me, that 
he knows better what is good for the workman 
than the workman himself knows. He tells 
the Senate Committee that unionism " is not a 
good thing for either the employer or the em- 

" We know what the rights of our employees 
are," he said in an address, " and we feel obli- 
gated and take pleasure in knowing that we are 
at all times doing all we can for the people in 
our employ." 

" How did you know," asked Senator Walsh, 
in the Senate inquiry, " that hundreds of thou- 
sands of your employees were content and satis- 
fied? " 

" I know it," said Judge Gary, " because I 

1 1 



make it my particular business all the time to 
know the frame of mind of our people. . 
My instructions regarding the treatment of the 
men are absolutely positive." 

It follows then, that the strike, which was a 
great surprise and shock to Judge Gary, was not 
due to Ms workers, not due to any grievances 
upon their part— for his instructions regarding 
their good treatment were " absolutely positive," 
—but to outside agitators and revolutionaries, 
and to foreigners— as he repeatedly tells the 
Senate Committee. 

Similarly when the subject of the twelve-hour 
day, the seven-day week, the '* long turn," and 
the like, came up for discussion before the 
Senate Committee, he was forced by the logic 
of his own position— for he had said that he 
knew at all times the frame of mind of his 
employees— to declare that his workmen really 
wanted the long day and Sunday work— 
although most of the workmen who testified be- 
fore the Senate Committee, and there were many 
of them, complained of the long hours and the 
Sunday work. 

" The question of hours," Judge Gary tells 
the Committee " has been largely a question of 
wishes, of desire, on the part of the employees 
themselves." They want them because they 
" want more compensation." 




So much for the industry as it looks in its 
broader aspects from above — to the only spokes- 
man among the employers. Taking up, specific- 
ally, the twelve-hour day complaint, the em- 
ployers argue against change from a two-shift 
to a three-shift basis on account of the immense 
cost entailed. It would require at once a large 
increase in the number of workmen employed, 
when the labour supply in America is already 
dangerously short: and in most steel-towns the 
housing is far from sufficient for such added 
population. There is great difficulty also in 
making wage readjustments; for if the workers 
go to an eight-hour day and expect twelve-hours 
pay for it — and they cannot live on much less — 
it means an enormous addition to the labour-cost 
of steel. The eight-hour day has already been 
introduced in a number of American steel 
mills, though in none of those owned by the 
United States Steel Corporation: and it is 
universal in England— and has been for many 

Another thing that disturbs the employers 
profoundly— and I am trying to show how the 
situation looks and feels to them— is what seems 
the utterly wild demand of the more radical 
groups of labour not only to a voice in settling 
labour questions (which is all that the conserva- 
tive labour movement has asked in the past) but 




T I 



in the management of the industry itself. Thev 
assert that the whole labour movement is beinj 
penneated with these dangerous ideas: sever^ 
of them told me that they had formerly held 
Gompers m high esteem as a conservative labour 
leader but that he now seemed to have yielded to 
the radical element. They made a great point 
-Judge Gary did in his Senate testimony- 
of the leadership of such men as William Z. 
Foster, who was formerly a radical syndicalist, 
and a member of the I. W. W. They have had 
repnnted and distributed widely Foster's smaU 
red book. I had it offered to me four different 
fames m as many days-to show what labour 
IS alter. 

They see clearly the enormous complexity and 

bu if7 Si: ^^^"^'"'^ "^''^'"^'^ *-/have 
bmlt up. They see the comphcated technical 
processes m their industry-I visited at Gair 
tlie huge establishment where the by-products 
of the coking ovens are reduced into various 
valuable oils and chemicals— they see the im 
mense mtricacy of their organization for digging 
and shippmg the ore and the coal and for manu- 
facturmg and selling their products from China 

m^Tr 7"^ ^^"""^ ^^^ ^^^' '' '^^'' '^ throw 
this delicate mechanism out of gear. The idea 

then, of crowds of ignorant workers, who have 

no knowledge of the problems involved, no train- 



ing to deal with them, breaking in with extreme 
demands for a share or a control of the manage- 
ment seems wildly destructive and disastrous. 
They fear it desperately— and exhibit as a proof 
of the reasonableness of their fear what has 
happened in Russia. They regard it not only 
as meaning the destruction of their own power, 
and of the organization which they have built up 
so painfully through so many years, but as a 
complete overthrow of our institutions. The 
solid earth of traditions, economic practises, legal 
regulations— their very earth seems crumbling 
under their feet. I am trying here to show how 
the situation really looks and feels from above. 
It is this feeling that has brought so large a 
number of employers, many of whom do not 
agree with his policies, to the support of Judge 

One of the more moderate employers said to 
me : " We probably made a mistake in not sooner 
establishing a basis of real co-operation with our 
men: but that is past: and now that the issue 
has come in the form it has, we've got to stand 
by Judge Gary." 

One unfortunate effect of the present crisis 
has been to drive both sides to extremes. The 
employers' group has undoubtedly been moving 
toward the extreme position of Judge Gary: and 
the labour group has undoubtedly been moving 


away from Mr. Gompers toward the more radi- 
cal leadership. But there are also tremendous 
counter-influences at work, and many quiet re- 
constructive experiments— which I shall describe 


The Industrial Crisis as it Appears to the 


HAVING examined, in the previous 
chapter, the point of view of the em- 
ployer-capitalist in the steel industry, 
I wish now to show how the same conditions 
appear from below to the workers. It is only 
as one tries to understand how the worker feels 
and thinks: his own actual point of view: that 
we can get at the problem. 

When I went to Gary to make inquiries about 
the steel strike I had in mind the twelve demands 
made by the national leaders when the men 
walked out on September 22, 1919, but I heard 
only two discussed with any emphasis either by 
the workers or the management. 

First, the twelve-hour day. 

Second, the right to organize and to bargain 
collectively with the employer. 

The twelve-hour day is a very real thing in the 
life of Gary: and I tried in a number of specific 
cases to find out what it means. Here is the 
exact daily schedule of a skilled American work- 
man who does eleven hours a day during one 









week and then thirteen hours s night during the 
next. He has his Sunday free, though many 
men in the steel industry stOl have the seven- 
day week: nor does he do the "long-turn" of 
twenty-four hours continuous service when the 
change from day to night work takes place— a 
practice still persisting in some centres of the 
steel industry. In order to get cheap rent— 
for there is a great shortage of housing in Gary 
—this man lives four miles out from the mill 
He must, therefore, in order to be on time, get 
up early. ° 

4: 30 A.M. he arises and gets breakfast. 

5 : 10 he leaves home. 

5 : 55 he reaches the mill. 

6 : 00 he begins work. 

He is on duty steadily until five o'clock in 
the afternoon. There is no stoppage for the 
luncheon hour, but he has time, during waiting 
periods, to get something to eat. He arrives 
home at six o'clock: soon after he finishes his 
supper he must go to bed, for at 4:30 in the 
morning he must be up again. 

During the night shift he gets up soon after 
three o'clock in the afternoon, starts work at 
five o clock, works thirteen hours, until six in 
the morning, is home at seven, and in bed before 
eight. Including the time it takes to go and 
come from the mill this man's time is really 





commanded for some fourteen hours every- 

He has been at this work all his life; he now 
makes $7.87 a day. 

" I don't live," he said, " I just exist— work 
and sleep. I don't get any time to see my 
family. I can't go to any entertainments with- 
out taking it out of my sleep : and I am too tired 
to go to church on Sunday, or to do anything 
else but lie around." 

Another striker, a Pole, said to me in broken 
English : 

" They tell us go to school, learn American. 
When we get time? Twelve hours a day I 
What the hell they want! " 

Remember, I am trying to show just how it 
looks from below. 

According to Judge Gary's testimony before 
the Senate Committee there are 69,284 men in 
the mills of the United States Steel Corporation 
(out of about 270,000 employed) now working 
the twelve-hour day— and there are many thou- 
sands more in the independent companies. Most 
of the workers actually engaged in the steel mills 
are twelve-hour men. The ten- and eight-hour 
men are mostly in other branches of the work, 
mines, transportation and the like. A great 
proportion of these twelve-hour men are igno- 
rant foreigners, of some forty-two nationalities 



at Gary alone, speaking a babel of tongues and 
hitherto unorganized and unorganizable. 

When I remarked to a group of workers that 
.Judge Gary had told the Senate Committee 
that employees of the United States Steel Cor- 
poration desired a twelve-hour day, and even a 
seven-day week, in order to make more money, 
I was greeted with a shout of laughter. 

"Want it!" said one of them. "We can't 
help ourselves. The mills run on the two-shift 
basis and it's either twelve hours or quit. Be- 
sides, at the rate of wages per hour paid by the 
company most of the men could not live unless 
they worked the long hours." 

So much for the twelve-hour day: the Senate 
Committee, in the recent conclusions, after in- 
vestigation, said: 

" That the labourers in the steel mills had a 
just complaint relative to the long hours of 
service on the part of some of them and the right 
to have that complaint heard by the company. 
We believe where continuous operation is 
absolutely necessary the men should at least be 
allowed one day's rest in each week." 

The other great complaint, the demand to 
organize and bargain collectively, was more 
complicated, went down deeper into the roots of 
the controversy. For if the workers were 
granted the eight-hour day and the six-day week 




this other demand would not only persist but 
would probably be strengthened. I met one 
steel-employer who said to me: " If you give an 
inch: if you let them discover that agitation and 
organization gets them anything, you're gone. 
Gary's right." 

He spoke of Rockefeller's introduction of the 
eight-hour day and shop committees in his 
Colorado plants. "Did it stop the strike? " he 
asked. " No, they went out with all the others. 
So did the Cambria mills where they had com- 
pany unions. Gary's right." 

There was one independent mill that was 
scarcely touched by the strike. It was looked 
upon with some envy in the steel industry. Its 
superintendent explained how he managed his 

" Catch 'em young; treat 'em rough; tell 'em 

So this question of unionization and collective 
bargaining— as Judge Gary testified— was the 
real crux of the strike. He saw it long ago 
when the Steel Corporation was organized: and 
he has never changed in his opinion or in his 
policy of opposition. 

The workers also recognized this as the crux 
of the problem. I did not find much complaint 
of wages at Gary, for average wages of all em- 
ployees since 1914 had increased from $2.93 a 


day to $6.27 per day. 114 per cent., an increase 
a little larger than the increase in the cost of 
of^Vj r^^ "^'"^ * considerable number 

houses or who owned th^Iorht:. Z!Z 

Tuvlt . r 'r*^ ""^ *^^ corporation "n 
buymg stock These were mostly the more 
highly skilled men, either Americans or fo^ 

These men. for the most part, did not strikeTt 

then ?^«f *r' ^^''"P. ""^ '^''^''' ^hat it was, 
then, that they wanted. Every one of them had 

been workmg in the Gary mills: every ^e of 
them spoke English well, two were of pure 
Amencan stock, one was of Dutch anceZ 
Pdish."''' "°^ '^'^^'^^^' *- Serbian. 1^' 
Since I am trying to show exactly how the 

exactly the answers I got: 
«S! "'^ striding for freedom." 

« -Sn* 1° ^°" f '^ ''^ ^""^'^^'"^ " I asked. 

tte S tl "f * *° ''^^^ °"^ organizations, 
the right to employ representatives to act for 

rT^hf f r *'' ^'''' Corporation doe^^ and the 


I found this group of men very intelligent. 
They told me that it had been the settled policy 
of the steel corporation from the beginning to 
fight unionism and one of them handed me a 
pubhcation containing a copy of a resolution 
passed by the Steel Corporation on June 17, 
1901— six weeks after its organization (which 
I have since verified; it appears in the reports 
of the United States Bureau of Labour), as 
follows : 

" That we are unalterably opposed to any 
extension of union labour and advise subsidiary 
companies to take firm position when these ques- 
tions come up and say that they are not going to 
recognize it, that is, any extension of unions in 
mills where they do not now exist, that great 
care should be taken to prevent trouble and that 
they promptly report and confer with this 

While Judge Gary testified before the Senate 
Committee that men were never discharged for 
belonging to unions, the strikers not only assert 
here at Gary, but witnesses from the Pennsyl- 
vania mills asserted before the Senate Com- 
mittee, that many such discharges had been 

" Oh, the foremen don't say: ' You're a union 
man: get out.' But every movement, every 
whisper, in the mill is known. If we have a meet- 



ing, we know there is a spy inside, or else the 
foremen or other officials come and stand out- 
side the hall and watch the men go in. Let a 
man try to get the workers together, try to 
organize, and some day he'll get his pink slip 
because he has been ten minutes late, or because 
he's had an accident, or for one of a hundred 
small excuses." 

WTiatever may be the instructions from Judge 
Gary, this is what the strikers everywhere in the 
steel districts believe. Indeed, the second de- 
mand of the twelve that they made when they 
struck reads thus: "Reinstatement of men dis- 
charged for union activities, with pay for time 

Another thing they believe, is that foreigners 
of so many nationalities, who are now accused 
of causing most of the trouble, were deliberately 
brought in by the employers in order to make 
orgamzation impossible. The difficulties in the 
way of unionizing ignorant men speaking twenty 
or thirty different languages are of course al- 
most insurmountable. 

" But the company denies this," I said. 

" Of course they do-but look at this adver- 

And they handed me an advertisement in the 
Pittsburg Gazette Times of July 14, 1909 
(which I also verified) : 



1 III 



"Wanted: Sixty tin-house men, tinners, 
catchers and helpers to work in open shops: 
Syrians, Poles and Roumanians preferred: 
steady employment and good wages to men 
willing to work; fare paid and no fees charged 
for this work." 

They have a most extraordinary mixture of 
human beings in Gary — forty-two different 
nationahties, the Croatians and Poles leading, 
with large numbers of Greeks, Slovaks, Rus- 
sians, Swedes, Hungarians. Latterly the Span- 
iards have been coming in: and since the war, 
and especially since unionism began to threaten, 
many ignorant Negroes and Mexicans. In the 
main mill at Gary over 1,000 Negroes are now 

I asked why it was, then, if this was a strike 
for freedom, that so many men went back to 
work so soon after the strike began. 

" That's easy enough to answer. In the first 
place the power and watchfulness of the mana- 
gers was such that we never could form a very 
strong union. How can you get ignorant 
Hungarians, Italians, Poles, Negroes and Mexi- 
cans together and teach them the value of organ- 
ization when the dread of the boss is always 
over them? And no sooner does the strike start 
than the military comes in and prevents picket- 
ing and large meetings. Many of these for- 



eigners are easily frightened by soldiers: they've 
had experience at home. On the other hand the 
most intelligent men, who ought to be leaders, 
hold high-paid places, or are buying company 
houses, or are getting bonuses, or are working 
for pensions. They know that if they go out 
they lose everything. Since this strike the com- 
pany has done its best to stir up racial and 
national feeling between the skilled American 
workers and the Negroes and foreigners. It's 
their cue to keep us apart and disorganized. 
So it has got to be a movement largely made up 
of the unskilled labourers and they are for- 
eigners. And there you are. Oh, they know 
their business— the steel corporation! And 
that's what has made wild radicals of some 
of the foreigners: they don't see any other 

way out except secret organizations and revolu- 

Another thing these workers believe— and be- 
lieve everywhere in the steel districts, as shown 
by the Senate investigation,— is that the gov- 
ernment is somehow against them: the govern- 
ment meaning to many of the foreigners— for 
they know next to nothing at all of American 
institutions— the local police. I am not entering 
into the question of whether they are right or 
wrong but trying to get down what they actually 
beHeve or feel, for it is not upon what they 




ought to believe and feel that they act, but upon 
what they do believe and feel. Well, they be- 
lieve that the officials and constabulary are con- 
trolled by the steel companies. In Pennsylvania 
there is every evidence of suppression and even 
violent suppression by the constabulary. Much 
testimony was given before the Senate Com- 
mittee to show that there is no such thing in 
some of the steel towns as free speech or free 
assemblage. The companies assert that this 
control is necessary to preserve order and pro- 
tect property: but from below, to the strikers, 
it looks like oppression. 

Many of the officials in steel towns are em- 
ployees of steel companies. Even in Gary, 
where the control has been less rigorous, I heard 
much of the same kind of complaint. Whether 
the strikers are right or wrong, no honest in- 
quirer can avoid the impression that they feel 
themselves suppressed. Much is done for them 
by the steel corporation: but of themselves, 
either by political or social organization, they 
feel that they are allowed to have no say about 
the vital conditions under which they work. 

"But," I argued, "Judge Gary said to the 
Senate Committee that any worker or group of 
workers could make a complaint and get it 
remedied: that all superintendents were especi- 
ally instructed upon this point." 




I am going to put down the exact answer I 

"Say, Mister, you weren't born yesterday, 
were you? What chance do you suppose one 
* hunkie ' or a bunch of * hunkies ' would have 
getting to Judge Gary with a complaint, or 
even getting to the head men of the Illinois 
Steel Company? And what do you suppose 
would happen if they complained very often 
over the head of their foremen? Here's the pink 
slip for you guys." 

There are many other minor complaints— so 
the strikers argue— that can only be met when 
the workers are organized, just as the various 
mills are organized, in one body, and can meet 
the employers upon equal terms. There are ex- 
amples of petty graft and petty oppression by 
foremen upon ignorant workmen, men are laid 
off without explanation or excuse, the plants 
are closed down without warning, and the loss 
falls upon the workers (thirteen per cent of the 
possible working time is thus lost every year to 
the employees). 

This state of mind at Gary, and elsewhere in 
the steel industry, has resulted in vast losses to 
every one concerned. A considerable number of 
foreigners drew their money from the postal- 
savings bank, sold their liberty bonds, and went 
home to Europe, thus further reducing and dis- 



organizing the labour supply. Some of the 
skilled men went to work in other industries. 
Two electricians, for example, whom I met, had 
easily found work at the union scale of a dollar 
an hour in Chicago. The mills were running 
inefficiently, with many inexperienced men, and 
the whole morale was low: and this at a time 
when the world was never so much in need of 
steel products. 





» ill 


The Imputed Causes of the Unbest 

IN two former chapters I endeavoured to 
exhibit a typical industrial situation in 
America— that at Gary, Indiana, during 
the recent steel strikes, as it looked, first from 
above, to the men who paid the wages, and, 
second, from below, to the men who received 

We may now inquire into the immediate causes 
of this unrest, as set forth by leaders on both 
sides of the controversy. It is to be under- 
stood that these are the immediate and imputed 
causes— not necessarily the real or deeper causes, 
which will be considered later. 

Judge Gary told us with conviction that the 
great majority of his workers were contented, 
that they wanted no strike and no union, but 
that they were incited and intimidated by " out- 
side agitators " and " revolutionaries." He said 
that alien elements with radical beliefs were 
largely instrumental in causing the trouble. 

"You think," asks Senator Kenyon, at the 
investigation, " that this foreign element is pre- 
cipitating the strike, do you not? " 




" I do," responded Judge Gary. 

Mr. Gompers, upon his part, was equally 
clear. He told us that the workers were not 
contented, that they were compelled to work 
unnecessarily long hours, that they were not 
allowed to organize or to have any voice in the 
determination of the conditions under which 
they lived : that the workers were not intimidated 
by " outside agitators " or " revolutionaries " but 
suppressed by the employers. 

Here, then is the very heart of the con- 
troversy. Judge Gary asserted that the trouble 
came from outside his steel plants and steel 
towns: Mr. Gompers asserted the trouble was 
inside of them. Judge Gary thought that the 
trouble was imported into Gary from Washing- 
ton where the American Federation of Labour 
has its headquarters, or from Russia. Mr. 
Gompers thought the trouble was in Gary itself. 
The remedies suggested follow hard upon the 
convictions of each group. Judge Gary — and 
a considerable proportion of the employer class 
in America— believes that if somehow these " out- 
side agitators," "revolutionaries," "alien dis- 
turbers " could be squelched all the trouble would 
speedily disappear. So we have been seeing re- 
cently in America a number of extraordinary 
applications of this cure. Judge Gary himself, 
quite logically from his point of view, refused 


to confer with " outside agitators "—Mr. Fitz- 
Patrick, Mr. Foster and others. In Pennsyl- 
vania the constabulary put them in jail; refused 
to let them hold meetings. Upon the belief that 
the ideas that are disturbing industry came in 
from the outside— from Russia especially— they 
raided private homes and halls at Gary, and ac- 
cording to a lieutenant of the intelligence de- 
partment of the United States Army, took away 
some tons of radical literature. At the Senate 
investigation Senator Smith of Georgia asked 
the lieutenant of intelligence who investigated 
the " reds " of Gary this question : 

Senator Smith: If we shipped all the alien 

agitators and organizers out of the country 

Lieut. Van Buren (interposing) : There would 
be no more trouble at all. 

We are beginning literaUy to practise this 
policy, which seems so easy a solution to Senator 
Smith and Lieut. Van Buren. Already the 
American ship Buford, guarded aboard by 
soldiers and accompam'ed at sea by a naval 
escort, has taken some 200 of these alien agita- 
tors away from America, and returned them to 
the lands from which they got their ideas. 

This policy of meeting the unrest finds a 
cruder echo— and yet a familiar one: I heard it 
often recently among ordinary comfortable 
people : " If a few of these agitators and ' reds * 



were taken out and shot, we'd soon get rid of 
the trouble." 

Now the logic of these remedies is indispu- 
tably sound: if the unrest is caused by outside 
agitators, and by alien revolutionaries as Judge 
Gary asserts, then if you remove the agitators, 
seize and destroy the literature containing the 
ideas, and prevent meetings in which they are 
aired, you stop the unrest. This is perfectly 

So much for the employer's view of the cause 
of the unrest and the remedy for it. The leaders 
of the workers, as I said, hold the contrary view, 
that the trouble is inside of industry, not im- 
ported from without: and, they proceed with in- 
tense conviction to act upon their belief. They 
try in every way, by speeches and publications, 
some of them of the shrillest and most revolu- 
tionary kind, to show that conditions among 
working people in America are dehumanizing, 
that injustice prevails, that men have become, as 
their recent " bill of rights " declares, " cogs in 
an industrial system dominated by machinery 
owned and operated for profit alone." They 
are so eager to prove their contention that they 
welcome every kind of investigation. Judge 
Gary profoundly distrusts public inquiries be- 
cause, as he told the Senate Committee, they 
"give opportunity to certain men to air their 


views and get before tlie public certain propa- 
ganda that is vicious and calculated to do harm." 

But the workers eagerly desire these inquiries : 
and in the case of the recent steel strike did their 
best to get before the public the facts, as they 
saw them, regarding the twelve-hour day, Sun- 
day work, the " long-turn," the speeding-up of 
workmen, the denial of the right to organize, the 
suppression of free speech and free assemblage, 
and so on. The first great item in their pohcy 
is publicity: the second is organization. The 
motive of the first is not only to stir up their 
own people but to get their case before the 
public : the motive of the second is to help them- 
selves to their own relief: their key words, there- 
fore, are " agitate " and " organize." 

Now the issue that arises here between the 
two groups is an issue of fact : it is a question for 
the jury of the American people. Is the trouble 
and unrest — or any part of it, caused by condi- 
tions inside of the steel towns, inherent in the 
present state of the industry, or is it caused by 
" outside agitators " and " alien radicals "? 

As usual in cases presented to that great, 
impatient, more or less inattentive jury of public 
opinion — which hates desperately to remain long 
enough away from private business really to hear 
the evidence — ^there is an enormous amount of 
exaggeration on both sides, extreme statements. 






the imputation of the worst possible motives, 
personal abuse. It is ever the case that one 
extreme view tries to justify itself by magnify- 
ing the other extreme view. Extremes invariably 
breed extremes. Thus Judge Gary and the 
steel employers magnified the revolutionary ele- 
ments among the workers, which were in reality 
unimportant either in numbers or in influence. 
They did their best to " play up " Foster and 
Margolis, and to try to convince the jury that 
these men really represented the views of 
American labour. More time was spent by the 
Senate in examining these two relatively inconse- 
quential figures in the steel strike — Margolis, 
a lawyer having no connection whatever with the 
strike itself, and Foster being only one of a 
committee — ^than was given to any other wit- 
ness except Judge Gary himself. The steel 
employers had reprinted and circulated widely 
among employers, business men and editors, 
Foster's red pamphlet on Syndicalism with this 
inscription on the outside: 

"William Z. Foster, one of the authors of 
this book, is in charge of the present campaign 
to organize the steel strikers." 

They gave this pamphlet a far wider circula- 
tion than ever Foster was able to give it: they 
aroused just the curiosity about the ideas which 
it contains, and which they are trying to 


combat, that the radicals themselves failed in 

Now, I am not here going into Foster's denial 
that this wild book published nine years ago 
represents his present beliefs— in another chap- 
ter I shall exhibit the true relationship of radi- 
cals to the American Federation of Labour — 
I am merely illustrating the point that the 
steel employers "played up" these extremists: 
and at the same time refused to meet and deal 
with the moderate leaders, who represent the 
great solid masses of American labour. 

On the other hand, the extremists upon the 
side of labour play exactly the same game. I 
have examined recently a number of the more 
extreme publications issued by radical labour 
groups, some of them circulated at Gary, 
Indiana, and I have attended radical meetings 
and heard radical speeches. To many of these 
extremists Judge Gary is a very devil: all capi- 
talists are devils: any one who sees anything 
good in the " present system " is a " tool." They 
do not recognize the fact that an immense pro- 
portion of American industry to-day is based, so 
far as labour conditions are concerned, upon 
reasonable conferences between employers and 
employees: or that many employers and 
managers in America are earnestly and sincerely 
endeavouring to work out new methods of co- 




operation with their workers, — as I shall show 
later, — or that even Judge Gary has encouraged 
among other things great improvements in 
safety-devices in his mills — a really remarkable 

Conservative extremists thus stimulate radical 
extremists. We have seen employed in this steel 
strike the now familiar technic of war. Both 
sides try to prove atrocities: both sides assert 
that the other is using the poison-gas of propa- 
ganda, and the dum-dum bullets of intimida- 
tion. Each side or a part of each side is doing 
its best to stir up hatred and suspicion of the 
other— with the danger always present that these 
violent views may involve the great quiet ma- 
jority of both employers and employees who are 
trying to work out humanly, decently, and 
patiently the enormously complicated problems 
which confront all of us. 


The Real Causes of the Uneest 

IN this chapter I shall endeavour to 
answer the question: How much of the 
trouble and unrest in American industry is 
caused by " outside agitators " and " alien radi- 
cals " : and how much is caused by conditions 
inside of industry? Judge Gary thinks that 
the trouble, as I showed in my last chapter, is 
incited from outside: Mr. Gompers thinks it 
due to conditions inside. 

There is no doubt that what Judge Gary 
calls " outside agitators " did come in and organ- 
ize the steel workers. At its St. Paul Conven- 
tion, in June, 1918, the American Federation 
of Labour appointed a committee headed by 
John Fitzpatrick, President of the Chicago 
Federation of Labour, who was never connected 
with the steel industry in any way, to go into 
the steel towns and organize the men. There is 
no doubt, as Judge Gary declares, that there 
are a few revolutionaries and alien radicals, 
some of them holding the extremist views, to be 
found at Gary and in other steel towns: there 
is no doubt that there is considerable violent 


" literature " in circulation in these towns. There 
is no doubt, also, after the workers went out, 
that the familiar tactics of the strike— persuasion 
verging always upon intimidation— did take 
place at Gary. All this is true. 

But let us look more closely at Gary. Here 
is a fine, bright city of some 80,00a people. It 
has an excellent Carnegie library, an impressive 
Y. M. C. A. building, good churches, superlative 
schools. It lives wholly upon mills owned by the 
United States Steel Corporation. Some of the 
workmen, largely Americans, are highly skilled 
and well-paid, often owning their own houses, 
sometimes having a few shares of stock in the 
corporation. But the great mass of the workers 
are more or less unskilled foreigners. There are 
forty-two diflFerent nationalities, speaking twenty 
or thirty languages. The majority in the mills 
work twelve hours a day, and many seven days 
a week. To an extent which at first amazes the 
inquirer these are young unmarried men. Forty- 
five per cent of the Servians, forty-eight per cent 
of the Roumanians, in the steel industry are 
single men (according to the United States 
labour reports ) . Even of those who are married, 
a large proportion have left their wives at home 
(sixty-two per cent of the Croatians, forty per 
cent of the Italians). They are strong boys 
or young men, largely peasants (sixty-four per 


cent) from farms in southern or eastern Europe. 
About one-third of these men are twenty-five 
years of age or under— hardly more than boys— 
eighty-seven per cent are forty-four years old or 
under. The steel workers themselves assert 
that a man is " old at forty " in the steel in- 
dustry : that men cannot stand the strain of the 
long hours and the heavy work. 

Consider these masses of young men, peasants, 
who came to golden America to make, instantly, 
their fortunes. They were wiUing to work all 
hours, all times, where American workmen 
would not and could not work ; they got as much 
money as possible, in as short a time, either to 
bring their wives over from Europe, or to go 
back there with their earnings. The poorest of 
them hved crowded together in the very cheapest 
places they could rent. There are some very 
poor places in this fine town of Gary: with no 
relation to any " American standard of living." 
Well, these men, working under such pressure, 
confused and divided, could not organize, had 
no way of expressing themselves. But they 
could get drunk. Before Indiana went dry 
Gary had probably the largest number of 
saloons to the population of any city in the 
United States: solid blocks of them. A popu- 
lation of young, unmarried men, away from 
home, working under high strain in an un- 



familiar and dangerous industry, without amuse- 
ment or diversion — ^this was the natural outlet. 
There may be those who think prohibition dis- 
courages economic unrest. I do not. I believe 
it is one of the causes of it: for it has removed 
the great deadener of human trouble — and 
human ambition— alcohol, and has left time to 
the workers to talk and meet and read: and 
money to buy publications and support organi- 

Consider, also, what the war did when it 
came. In the first place it brought the entire 
working force at Gary under an iron regime. 
Workmen could not go and come freely between 
Europe and America as they had always done, 
and they were worked harder and longer than 
ever: but on the other hand they got more 
money and had steadier work than ever before 
in their lives, for the steel trust raised wages 
eight times during the war. 

This, however, was only a minor result of the 
war. Consider what they were taught day after 
day during the struggle. It was not what was 
put into their pockets but what was put into 
their heads that counted. They were told that 
this was a war for democracy and that when it 
was over everything would be different and 
better. The War Labour Board at Washington 
laid down the broadest and most advanced char- 


ter of the rights of labour ever laid down in 
America. President Wilson said that after the 
war " there must be a genuine democratization 
of industry based upon a full recognition of the 
right of those who work, in whatever rank, to 
participate in some organic way in every de- 
cision which directly affects their welfare or the 
part they are to play in industry." 

Never before were workmen in the steel towns 
so courted: so distinctly made to feel that they 
were a part, and really an essential part, of this 
great American movement. For a moment a 
kind of thrill of partnership, co-operation, 
reached even the lowest labour groups. They 
all bought hberty bonds, or war stamps, they aU 
subscribed to the Y. M. C. A., and Red Cross 
funds— almost to the lowest man. I heard over 
and again in these industrial towns of the ex- 
traordinary feeling aroused during the war. The 
echo of it reached Europe : and was commented 
on there with a kind of envy as being some- 
thing better than other nations could achieve. 
This, the workmen felt, was a taste of trud 

For one glorious moment they were accepted 
as men working in a great common cause, side 
by side with the employers, all equally necessary. 
Hundreds of them, indeed, had actually gone 
into the army and fought in France. Some 



had lost their lives. The soldiers who returned 
to the mills had new and free ideas: in the first 
great parade of strikers at Gary some 300 of 
them marched in uniform at the head of the line. 

A new era of democracy and goodwill seemed 
dawning in the world. They were simple folk: 
they believed it: they felt it. We aU felt it. 

Then the war stopped and the disillusion- 
ment began. Nothing was really changed: there 
was no more democracy than there had been 
before! They had seen a vision, dreamed a 
dream: they had awakened. It was snatched 
away. Not only that, but the steel companies, 
not needing to speed up as much as during the 
war, began to discharge many men: and the 
workmen heard rumours that wages were soon to 
be reduced so as to get the industry back to 
pre-war standards. 

I am trying here to show just what happened, 
just what was the psychology of these masses of 

Well, they were back in the dull mills, work- 
ing twelve hours a day — they had ceased to be 
men, and were again mere machines. A labour 
leader quoted me that bitter cry of the workers 
— ^which originated in quite another industry; 


I work, work, work without end. 
Why and for whom I know not, 

I care not, I ask not, 

I am a machine." 

I "■' 



Consider, then, in all fairness, what happened 
next. Some time before the war ended the 
American Federation of Labour had begun its 
campaign to organize the steel workers. It went 
slowly: it was uphill business— until the war 
ended. And then many disiUusioned workers 
seized upon it as the one way of hope. The 
employers had done nothing. There was no 
way of getting at them. One man at Gary 
told me that Judge Gary was " as distant as 
God." Not a single man who has any real 
ownership or any real control of things at Gary 
either lives at Gary or is known to workmen at 
Gary. Not one! They are not pleasant places 
to live in— the steel towns. Most of the work- 
men I asked did not even know who was the 
" head man " of the Illinois Steel Company: and 
Judge Gary— of whom they have all heard— 
IS 900 miles away in New York. To these men 
the Steel Corporation is a vast, impersonal, in- 
human, unreachable machine. 

So they listened eagerly to the labour organ- 
izers, for these men told them the same things 
they had heard during the war: exactly what 
President Wilson had told them: democracy, 
more freedom, more life. 

But the moment they began to stir for them- 
selves—organize—they at once found against 
them the old set policies of the Steel Corpor^- 



tion: its opposition to unionism: its opposition to 
any change in the conditions which, since they 
had had a taste of freedom, seemed doubly irri- 
tating. In Pennsylvania when they tried to hold 
meetings they were suppressed by the constabu- 
lary, their organizers were arrested, their papers 
were seized. In Gary, homes were broken into 
and searched. They felt the old hopeless con- 
ditions closing in around them. 

Some years ago I heard deaf and dumb Helen 
Keller describe how, as a child, she tried to ex- 
press herself and could not speak, could not even 
make motions that conveyed any idea, could do 
nothing for herself. She described the wild 
fits of rage she went into. She was suppressed, 
inhibited. Something of the same kind goes on 
among masses of men who are not allowed self- 
expression. A certain number become reck- 
less: fall into rages: are wilhng to do anything 
to escape. 

This is fertile soil for wild ideas: for quack 
remedies: for blind revolt. When conservative 
labour unionism is prevented, the I. W. W. 
leader is there with a flaming doctrine that 
promises much and promises it quick: there are 
Utopian ideas from Russia. When open meet- 
ings and frank discussions are suppressed, work- 
men begin to hold secret meetings, make ex- 
treme demands, plot violent remedies. The 


ideas they hold are usuaUy of the vaguest and 
crudest. Chase them around with a few frank 
questions — as I have done many times — and you 
can ordinarily drive them into a corner and 
show them the want of logic, or reason, or even 
basis of fact, to support their beliefs. But you 
rarely convince them, for what they lack in light 
they make up in heat. How can they get light 
if all association and discussion is choked off? 
And how can anything else be expected when 
these groups of vigorous but ignorant young 
men are left crowded together in miserable 
places, worked to the limit of endurance, with no 
one paying any attention to them— body or 
soul — so long as they come to work every day? 
Here, then, we begin to get at the bottom fact 
about Gary: indeed, about our entire industrial 
life. It is the unrest, the unhealthy conditions, 
that cause the Bolshevism; not the Bolshevism 
that causes the unrest. Once the process starts, 
however, as a disease germ makes easy work of a 
debilitated human body, the radical agitation 
increases the trouble— accelerates it. 

If every radical alien were deported from 
Gary the causes of unrest would still remain. 
I spent most of the year of 1918 studying similar 
conditions in Europe: in every country I visited 
the same kind of unrest prevails— and no one 
attributes it either to aliens or outside agitators. 



One recalls, also, that exactly the same com- 
plaint was made by the slave-owners in the 
South before the Civil War, that the slaves were 
contented, and that all the trouble came from 
"outside agitators" and "revolutionaries" — 
John Brown, Garrison, Love joy, Lincoln. As 
for the deportation of agitators and the sup- 
pression of opinion, that policy was tried out 
upon a grand scale for many years by the old 
Russian government: Siberia was populated 
with deported radicals: read George Kennan's 
books. It did not stop revolution: probably 
stimulated its more violent forms. Look at 
Russia to-day. 

" While we can deport men for being anar- 
chists," said Senator Kenyon to the Lawyers 
Club in New York, " we cannot deport ideas." 
The first instinct of a man or a nation with a 
pain is to treat the symptoms: as we are doing 
now. Both sides are trying quack remedies : the 
employers a sure-cure bottle labelled, " Deporta- 
tion—Suppression " : and the workers a bottle 
with a red label: "Bolshevism." I don't 
know which is worse : which will sooner kill the 
patient. Why not do what any sensible man 
with a pain finally does ? — learn what the under- 
lying trouble is— the real disease— and try to 
reach and cure that? 



The Massed Forces Behind the Industrial 
Conflict — Organized Labour 

IT is now important, if we are really to 
understand what is going on, to inquire 
what are the massed forces behind the 
present industrial struggle. For the steel strike, 
the coal strike, big as they were, were only 
skirmishes in a far-flung battle line: and we 
cannot understand them unless we know the 
grand strategy of the conflict, the diverse fac- 
tions within both camps, and who the real com- 
manders are. 

Samuel Gompers is the type-figure of Ameri- 
can labour: he is the most powerful and domi- 
nating leader American labour has ever had : but 
he is to-day in great trouble. In this respect 
Gompers resembles most other leaders in the 
world. All leaders are in trouble. Wilson is 
in trouble, so is Lloyd-George. And for a 
simple reason: followers won't follow. Pubhcs 
have got out of bounds: they won't stay in old 
party lines, nor yet in old union lines: they 
challenge authority and discipline. They gibe at 



Gompers is one of the extraordinary men of 
America to-day, not only the arch-type of a 
movement, but a character, a personage. 

I shall never forget one vivid ghmpse I had of 
him in London last year. He was going down 
in some triumph as a great figure to visit his 
birthplace in the slums of the East End. Here 
it was that his Dutch- Jewish parents had lived : 
here he learned his trade as a cigar-maker: here 
as a boy he spoke low Dutch. 

I see him now striding down the street, a 
powerful squat figure, followed, a step behind, 
by a looming bodyguard of labour leaders. He 
was scattering the assembled and gaping sub- 
jects of King George, however well inured to 
the sight of potentates, to the right and left. 
His hat was set weU back upon his head, his 
chin was thrust forward, and he was throwing 
aside humorous remarks to his followers. So I 
saw him once again in Paris. So he strode full- 
fronted throughout Europe, so sure of himself, 
and of his entire equipment of ideas, so conscious 
of the immense power of American labour be- 
hind him— that he scattered to the right and 
left all peoples of all nations. He told British, 
French, and Italian labour leaders, quite posi- 
tively, what they must do to be saved. 

Gompers reminds one a little of Clemenceau — 
a kind of rougher Clemenceau without the 



French wit and finish, but with many of the 
same qualities of physical and intellectual force 
and vitality. Gompers, too, is a kind of tiger 
— an old man long habited to power, able, obsti- 
nate, vain, honest — a pattern of the pugnacious 
conservative. When the Chairman of the Senate 
Committee told Gompers that he could either 
sit or stand while ♦ testifying, he replied: 

" I will do anything but lay down." 

He will not "lay down": nevertheless he is 
in great trouble: and an account of what the 
trouble is will disclose clearly the problems which 
to-day confront American labour. 

For thirty-eight years, except one, Gompers 
has been president of the American Federation 
of Labour. He helped organize it. He has 
done more than any other man in shaping the 
American labour movement. 

In its beginnings the Federation represented a 
reaction from the policies of the old Knights 
of Labour. The Knights did a great work in 
their day: they helped give labour a national 
vision: but the organization was too indiscrimi- 
nate in its membership, too centralized in its 
control, too vague in its purposes: and it made 
unfortunate ventures into politics. 

Gompers avoided these mistakes. He built 
firmly upon narrow but strong craft unionism; 
he encouraged democratic control: he eschewed 


politics. He discouraged Utopian schemes: he 
urged labour to ask for specific things and a 
little at a time: better hours and better wages: 
and to clinch what they got with "collective 
bargains " with employers. If anything was de- 
sired from Congress or legislatures, labour was 
to get it just as business men got it, by lobbying, 
or by pledging candidates. 

I speak of Gompers as doing these things: he 
was, of course, only one of many leaders who 
represented the main stream of development 
during recent years of American labour organi- 

Well, it was a practical, hard-headed policy: 
and it has had a great influence in improving the 
material conditions of the more highly skilled 
groups of labour. Many of the craft unions are 
to-day very powerful, and rich. They have fine 
halls and office buildings, some have hospitals 
and homes, some have pension and benefit funds. 
The American Federation of Labour itself has 
a magnificent home office of the sky-scraper type 
at Washington: a very different place indeed 
from the cluttered little back office where I first 
called on Mr. Gompers, twenty years ago. 

Like all successful movements, labour organi- 
zation in America has tended to become institu- 
tionalized—the church of labour: and Gompers 
is the Pope of it. 



The leaders are of a very definite type : practi- 
cal, efficient, unimaginative business men. A 
group of labour leaders of successful craft 
unions cannot be distinguished to-day from any 
ordinary group of American business men. 
They are business men: and many employers 
have found them more than a match. They are 
traders: they meet* and haggle over minute de- 
tails of agreements: they work out complicated 
contracts: they handle and invest considerable 
sums of money. The American labour move- 
ment, so far as it is typified by Gompers, has 
the reputation of being the most conservative 
labour body in the world— as it undoubtedly is. 
It reached its very apex of power and honour 
during the war. It came as strongly to the sup- 
port of the government as any Chamber of. 
Commerce or Board of Trade. Gompers served 
on the Council of National Defence: and other 
labour leaders were used and honoured in many 

All this vigorous and successful development, 
of course, has not been without strong opposi- 
tion. At every Convention of the American 
Federation of Labour for years before the 
war Gompers had a fierce tussle for control with 
the radical or socialist left-wing of the movement 
—but always won out. Gompers has fought 
socialism tooth and nail for years, with the result 






that in America the old craft union leaders still 
dominate the movement, while in England, 
socialists are in control. 

The radicals charge that the policy of the 
American Federation of Labour has been too 
narrow, too strictly economic: that it has no 
social vision: that it is essentially aristocratic 
— that it has built up and protected the skilled 
crafts, but tended to neglect the great masses of 
unskilled, or foreign, or Negro labour. The pro- 
gressives say that better hours and more wages 
are not enough, that these things will never 
finally content the spirit of the worker: that he 
must strive for what many of them call, often 
vaguely, "industrial democracy." 

All of these charges have some basis in fact. 
The number of members in the American Fed- 
eration of Labour has never been more than 
a very small percentage of the total number 
of workers. The last census showed over 
27,000,000 wage-earners in America, including 
agricultural labourers, domestic servants, and 
other non-industrial groups. But of this 
27,000,000 fewer than eight per cent, were at 
that time in labour organizations affiliated 
with Gompers' Federation. Several of the 
greatest industries, where unskilled or foreign 
labour was largely employed, were left almost 
untouched— like the steel industry, the textile 




mills, the oil industry and others. On the other 
hand the mine-workers with many unskilled and 
foreign labourers are firmly organized and afBli- 
ated with the American Federation of Labour; 
so are the hod-carriers : and in the last two years 
there have been large accessions to the ranks of 
organized labour. 

This situation gave opportunity for the social- 
ists and radical labour organizations like the 
I. W. W. to come in. I was at the Lawrence 
strike in 1912. Here there were several old, 
small, aristocratic craft unions, but no attention 
had been paid to the masses of the foreign 
workers until the I. W. W. leaders came in with 
their doctrine that the interests of the whole 
working-class, foreigners and unskilled as well 
as Americans and skilled, were identical, that 
there should be one great union and a place for 
every worker in the industrial organization. The 
idea carried like wild-fire— as it has in other 
industries. Right or wrong, it was a ray of 
hope to thousands of neglected, under-paid and 
over-worked human beings. 

Another charge brought by the progressives 
was that the skilled craft unions, strongly organ- 
ized, could make advantageous bargains with 
the equally strong employers' associations and 
mulct the public. That is, the union, having a 
monopoly on labour, could force up wages ; and 





the employers, having a monopoly on the in- 
dustry, could force up prices — and the public 
would have to pay. I made a study some years 
ago of several extreme instances of this sort of 
bargaining under the title " Capital and Labour 
Hunt Together," and the practice still continues. 
The public pays high for both kinds of monop- 
oly. And the worst feature of all, in this sys- 
tem, as the great masses of workers are now 
suddenly discovering, is that the "public" is 
made up very largely of the immense wage- 
earning class in America that is not in any 
union, and is thus wholly unprotected. In short, 
the masses of the unskilled, the foreigners, the 
Negroes, help pay for the good fortune, the 
high wages, and the short hours of the highly 
skilled organized workers. 

This aristocratic unionism, this selfish atten- 
tion to their own interests, this neglect of the 
masses of labour, furnishes the chief ammuni- 
tion of the socialists and the radicals of the 
I. W. W. type in their attacks upon Gompers 
and the American Federation of Labour. It has 
also given powerful impetus to those in the 
labour ranks (many of them socialists) who 
want what they call a " real " labour movement, 
and therefore recommend a national labour 
party in America. They say that the American 
Federation of Laboiu' has no genuine recon- 



structive program like the British labour 
movement, and that it is controlled by a kind of 
political machine, headed by Gompers, which is 
impervious to new ideas or new methods : that it 
is old, rich, conservative, and no longer responds 
to the real aspirations of labour. I am trying 
here to put down the situation just as it looks 
from all sides. To be able to estimate the 
seriousness of the present unrest we must know 
all the factors in it. 

Now, several recent tendencies have served to 
throw more power into the hands of the radicals. 
In the first place there has been the long-evident 
drift in American industry toward the employ- 
ment of a greater proportion of unskilled men. 
Employers have introduced machinery and 
divided the tasks of labour so that each work- 
man has, so far as possible, only one simple 
manipulation to learn. Modern industry has 
tended to steal away the skill of the craftsman. 
Any foreigner, no matter how ignorant, any 
Negro, can quickly learn to do much of the 
work in many of the greatest of our industries. 
This tends to defeat the whole idea of the old 
unionism, based upon craft skill, especially as it 
apphes to the great basic industries. 

Other more immediate tendencies have devel- 
oped out of the war. Since 1914 all Americans 
have been more interested than ever before in 






Europe and in European movements: and espe- 
cially the workers. Among foreigners the Rus- 
sian revolution has had a profound influence: 
among the more moderate and thoughtful 
groups, the program of the British Labour 
Party. I have found in talking with labour men 
of all kinds recently an astonishing knowledge 
of these foreign movements. Ten years ago, 
except for a few socialists, American workers 
had little idea of anything beyond the horizon of 
American methods and American ideas. 

Another vital influence may be noted. This is 
the awakening self -consciousness of labour to 
its own power, dignity, indispensability, which 
came with the war. Labour was courted as 
never before, taken into government councils as 
never before, made to feel that in the future it 
would enjoy greater privileges than ever before. 
It came out of the war feeling that it had served 
well, done all that was expected of it; and was 
now entitled to the promised rewards. 

New and enthusiastic campaigns for the 
organization of hitherto more or less untouched 
industries, like the packing houses and the steel 
mills, were begun. Whole new groups of 
workers began to come into the ranks of organ- 
ized labour — actors, school-teachers, newspaper 
reporters, architects, nurses — and the wave even 
swept in many groups of government or public 


service employees— policemen, postmen, clerks 
and the like. The most powerful and ably led 
unions in the country— the Railroad Brother- 
hoods—came forward with an ambitious plan, 
the Plumb plan, for the future control of the 
railroads. A strong movement was launched 
for the organization of a new Labour Party, to 
carry the whole struggle into the political field 
— which I shall consider in another chapter — 
and finally a sudden, but enthusiastic, interest 
sprung up in developing wholesale and retail 
co-operative stores, on the English system, in 
order to meet some of the problems of the high 
cost of living. 

This sudden burst of new self -consciousness on 
the part of labour, new enthusiasm, new organi- 
zation, has been met by a cold douche both from 
employers and from the government. "They 
taught us to be lions' whelps during the war," 
as one leader said, " and now they want us to 
subside quietly into beasts of burden. We shall 
never do it." 

Now, the progressive and radical groups in 
the labour movement assert that Gompers and 
the American Federation of Labour are un- 
sympathetic toward most of the new move- 
ments: that all vital thinking and new leader- 
ship is frowned on by Gompers. They say 
that he does not believe in a Labour Party, 





nor in the Plumb plan, nor in the more 
or less vague but powerful demands for more 
"socialization" in industry. He sees the new 
unrest, but he knows only the rules of the old 
game as he has played it for fifty years. He has 
indeed tried to adapt himself to the new condi- 
tions — for example, in supporting a movement, 
which he could not have prevented, on the part 
of progressives like Fitzpatrick and Foster, to 
organize the meat-packing industry at Chicago, 
and later the steel industry, on a new plan, bor- 
rowed, in part, from the I. W. W. Aiid he has 
welcomed into the Federation some of the abler 
young radicals like Foster, who are now " bor- 
ing from within "—using the machinery of the 
Federation for pressing agitation and organiza- 
tion along the new lines. 

Thus Gompers, with the wonderful machine 
he has built up, finds himself attacked upon all 
sides. A labour party movement, began scarcely 
a year ago, and led by men in his own camp, is 
spreading rapidly. There were never so many 
unauthorized and uncontrollable strikes as there 
have been recently. Gompers advised the steel 
workers to delay their strike, as the President 
requested: but they paid no attention to him. 
There have been powerful and successful in- 
surgent unions — like the Amalgamated Clothing 
Workers — ^growing up outside of the Federa- 



tion. He excommunicates them, but it does no 
good. And finally, to cap the climax, the asso- 
ciation with government agencies formed during 
the war, which Gompers and the American 
Federation of Labour felt to be such a bulwark 
of strength, has suddenly crumbled away. He 
is no longer looked to and courted as the su- 
preme arbiter and spokesman of labour. He 
could not even prevent the government from 
enjoining the coal miners! 

Thus the whole great world of labour in 
America is in a new ferment — stirred to its 
depth as it never was before. 

As regards the tendencies now apparent it 
may be divided into three great groups: 

1. The old conservative unionists of the 
American Federation of Labour led by 
Gompers. While this group is wholly non- 
revolutionary, it is still very powerful: 
and if aroused, if it sees any of its hberties 
sUpping away, it will prove a tough fighter. 
This is equally true of the great railroad 
brotherhoods. The present policy on the part 
of many employers and politicians toward in- 
discriminate attacks on all organized labour 
tends to drive these conservatives into a more 
radical position. Gompers, for example, finds 
himself now attacked by an employer, Gary, 
and a politician, Pomerene, for just the 



kind of radicalism he has been fighting all his 

2. The new progressive group. This is 
mostly made up of the left wing within the 
American Federation of Labour which has been 
fighting Gompers for years and has now formed 
a National Labour Party, with a program 
much more radical, more socialistic, than that 
of the American Federation of Labour. No 
one knows yet how strong the sentiment 
behind the movement is, but from what I 
saw at the convention in Chicago I should 
judge that it would take very little to precipitate 
a considerable number of the workers of America 
into radical political action. 

3. The revolutionary groups. The chief of 
these is the I. W. W. but there are, or have 
been, many smaller bodies of communists, 
anarchists and syndicalists, especially among the 
foreign elements. In total mmibers this element 
is very small, and divided up into many and 
warring factions. 

Labour unrest exists: profound changes in 
alignments and leadership is going on. New 
and more radical men are coming to the front. 
Much will depend upon how this movement is 
treated by employers and political leaders. If 
it is indiscriminately attacked, if every leader 
who proposes a plan, or advances an idea not 


approved from above, is called a " Bolshevik," 
or arrested and clapped into jail, or deported, 
the result will be to drive the whole movement 
toward a more radical position, and more revo- 
lutionary methods. Here is a great awakening 
of life: new ideas and new enthusiasm: if it is 
met with understanding, if there is evidence of a 
desire for co-operation, there are possibilities of 
a new constructive epoch in American industry. 
Many such patient attempts at better under- 
standing and co-operation are now being made 
by both managers and men— I shall later tell 
of some of them— but there are also abroad 
wild councils of force which do not even try 
to understand what is happening and which tend 
to break down all the agencies of reasonableness 
and conciliation, and make for the very revolu- 
tion which they think they are preventing. 


The Massed Fokces Behind the Industrial 
Conflict — Organized Capital 

IABOIIR, as I have tried to show in my 
last chapter, presents no unbroken front. 
^ It is torn by factions, has no one pro- 
gram, nor any undisputed leadership. It has 
no unity. 

But neither does the employers' side pre- 
sent an unbroken front. Here also there 
exist wide differences of policy and program: 
an outline of which will lead to a clearer 
understanding of the present industrial con- 

Probably Judge Gary is to-day the out- 
standing representative of the more conserva- 
tive group of employers — ^the right wing. He, 
too, like Gompers, who typifies the more con- 
servative group of organized labour, finds him- 
self under attack. 

Judge Gary does not quite belong to the 
great group of industrial pioneers: Carnegie, 
Rockefeller, Frick : but he represents in general 
their attitude toward labour — the old tradition. 
He came a little later. He was not a steel- 



master; he was the man of finance whose pur- 
pose it was to develop and conserve. 

There was something magnificent about these 
pioneers: they were big, free men. They had 
imagination. In a new America, they had an 
unsullied canvas and they painted with a comet's 
tail. One who visits the city of Gary gets a 
vivid impression of the grand scale upon which 
they worked. Thirteen years ago, there was 
nothing here but a wilderness of sand-dunes; 
and to-day a city of 80,000 people. I don't 
know whether it was Judge Gary or some other, 
but consider going there thirteen years ago, and 
standing, let us say, upon one of the low hills 
overlooking the wide grey lake and saying: 

" Over there I will build my mills: there shall 
run the main street of my city: there I shall 
encourage churches and schools. This spot of 
infertile sand I will cover with soil: I will water 
it: I will plant trees. This shall be my park 
where all the people may enjoy themselves." 

Think, moreover, of having both the power 
and the money— unlimited millions — to create 
the city and the mills there planned, and to see 
that creation succeed! 

Well, these were genuinely big men and they 
did a great work. There was something cosmic 
about the way they dreamed, the way they built, 
the way they accumulated money : and the way 



they have given it away. Frick, dying the other 
day, left $117,000,000 to the American people. 
The very boldness and success with which they 
created and built gave all the men of that gener- 
ation an extraordinary sense of authority and 
self-confidence. In visiting many of the offices 
of the Steel Corporation, I found one motto, 
printed upon card-board, upon the wall. It 
somehow expressed the spirit of the place, in- 
deed, the very spirit of American industry and 
these were the confident words: 

3t Can iBe Bone 

Like so many of these early men. Judge Gary 
came up from the bottom. He was born on a 
farm in Illinois where as a boy he worked twelve 
hours a day — as he relates when the twelve-hour 
day in the steel mills is discussed; he was a 
lawyer, a judge, and finally a great financial and 
industrial organizer — the head to-day of the 
greatest corporation in the world, with more 
power over the lives of human beings than 
many a king. A magic career! 

These earlier men all dealt boldly not only 
with material but with men. They were strong 
individualists. They did not confer, or co- 




operate, or teach : they dictated. It was the way 
of the times. They fought union labour when 
they could, dealt with it when they must, and 
finally crushed it. But in those days if a work- 
man did not like the management, or the man- 
agement like him, he could and did get out. But 
then there was always a place for him to go: 
there was always the West; and more or less 
free land and free opportunity. The restless, 
agitating, organizing spirits thus left the ranks 
of the workers : whereas in Europe, there being 
no easy way to escape, they remained in the 
workers' ranks and agitated and organized. 

But a change in this respect has come swiftly 
in America: there is no longer a free escape: 
no open and easy West. So the restless spirits, 
more and more, have to remain where they are 
and take out their restlessness in social organiza- 
tion. This is only one of many profound 
changes that have been going on in America 
since Judge Gary was young: since the great 
days of the creators and developers of industry. 
I wonder sometimes if he fully visualizes these 
changes 1 

Judge Gary is an old man: he is 74 (Gompers 
is 70)— a strong man with strong ideas, very 
sure of himself. No one who talks with him— 
as I did— can doubt his sincerity. He wants 
to do right, he believes he is doing right. He 



is quiet-voiced and tranquil and deliberate. 
When he talks he asserts very little, but seems 
curiously to comment, to suggest, to question. 
He is frank: and he has the courage of his 

I tried in a former chapter to show, in his 
own words, just how he looks at the present 
industrial ferment. He stands, so far as labour 
is concerned, just about where Carnegie and 
Frick stood in 1892. He judges the twelve-hour 
day in his mills by his own twelve-hour day 
sixty years ago on the farm. He has indeed seen 
the approaching unrest and has tried to meet 
it with a really wonderful development of wel- 
fare work: safety devices, housing, hospitals, 
pensions, play-grounds and the like. His cor- 
poration spent $17,000,000 in 1918 in these 
various activities which I hope to describe more 
fully later, for they are as fine an experiment as 
has anywhere been made of welfare work as a 
means for meeting industrial unrest, and exhibit 
both the strength and the weakness of that 

Judge Gary's autocracy has been benevolent: 
but it has been an utter autocracy. As to the 
new spirit stirring among the workers, especially 
during and since the war, I think it fair to say- 
judging by his own speeches and testimony — 
that he has never sensed it at all. He has done 


ll I 

t .1 

* ', 


iimch for the bodily comfort of his men: of the 
soul of tlie modern worker he seems never to 
have had a glimpse. 

I said that Gompers and the American 
Federation of Labour represented the most 
conservative labour body in the world. Judge 
Gary represents the most conservative group 
of employers. It is. only in the United States 
Steel Corporation and in certain independ- 
ent steel companies that the twelve-hour work- 
day and the seven-day week remain entrenched. 
There is no metallurgical necessity for the long 
day: the eight-hour day has been introduced in 
England and in Germany: and in other indus- 
tries having continuous operation, like the paper- 
pulp industry, the three-shift system is the rule. 
Judge Gary is also the last great bulwark 
against labour unionism and collective bargain- 
ing. Even in the steel industry, some of the 
principal employers have clearly recognized that 
new human devices must be created to meet 
new human needs. John D. Rockefeller, Jr., 
has introduced company unions and shop com- 
mittees in his Colorado steel plants: and he has 
the eight-hour day. The Midvale Steel Com- 
pany, one of the great independents, also has a 
shop-committee system — of which I shall speak 

Of course, one great source of Judge Gary's 



strength in his position as a leader is that he 
has made his policy pay— and pay big. And 
this is a tremendous argument anywhere in the 
world. Here are the profits of the corporation 
since 1914 — after deducting federal income 



$ 58,267,925 

There have been dividends and extra dividends 
—amounting, on common stock in 1917 to five 
per cent, regular and thirteen per cent, extra 
and in 1918 to fourteen per cent. Large sums 
of money have also gone into improvements of 
the property and into surplus. 

Do not think that these profits escape the 
eyes of the workers. They are published in all 
the labour papers : and when the argument that 
the cost of introducing an eight-hour day makes 
it prohibitive these figures are produced. One 
of the labour papers has a heading called " Hid- 
den News"; and into that column goes the 
profit records of great employing corporations 
of all sorts. Here is an item recently pub- 

" The Western Sugar Company yesterday 
declared an extra dividend of ten per cent, in 


addition to the regular quarterly dividend of 
one and three-fourths per cent, on the common 
and preferred stocks." 

It is necessary in trying to understand this 
problem of industrial unrest to see how these 
things really look from below to the workers. 
We must ask what the reaction is upon tens of 
thousands of striking, steel workers, for example, 
who are asking for better conditions when they 
read these reports of the profits of the steel 
trust: or upon the same men, struggling with 
the high cost of living and the shortage of sugar, 
when they see the large profits of companies 
dealing in food. Get their point of view for a 
moment! They feel powerful resentment: they 
act upon the information they have: no one tries 
to explain except the radical orators. Suppose 
we cut off the radical orators, suppose we 
destroy the radical hterature which assumes to 
interpret these facts : does that change the facts 
or remove the causes of resentment? If these 
profits and conditions are necessary or reason- 
able in industry, is there not some way to ex- 
plain them so that the workers can understand? 
I talked recently with a nimiber of employers: 
one of whom had a strike in his plant lasting for 
three months. It had nearly ruined him and 
his business: the overhead charges were eating 
him up. He told me eloquently of the diiBculties 






he had to meet, the complexities and hazards of 
his business, the competitive nature of his field 
of operations : and of the utter unreasonableness, 
as he saw it, of his striking workers. I was so 
much impressed with what he said that I asked : 

" Isn't there some way that you could explain 
yoiu- position to your workers, or their leaders, 
as you have to me? " 

He scouted the idea. 
Have you tried? " 

No — what's the use? They don't want to 
understand: they can't understand." 

" But," I said, " they understand enough to 
tie you up and ruin you — and ruin themselves at 
the same time, for that matter. Isn't it worth 
trying? " 

Judge Gary thus represents the most con- 
servative American attitude toward labour: but 
other groups and other ideas are everywhere 
springing up. Let me tell a little experience 
I had not long ago, for it throws a vivid light 
on the whole problem of the employers' attitude 
toward labour. I was waiting for a short time 
in the reception room of one of the steel plants 
at Gary. There happened to be four technical 
publications on the table for waiting visitors to 
look over. So I looked them over. One of them 
was a copy of " System," another a copy of 
" Industrial Management." And as I read, my 


wonder grew. Right here in one of Judge 
Gary's offices was enough of the dynamite of 
new ideas to blow up his system! 

Here I read of shop committees, co-operation 
with workers, the need of new kinds of manage- 
ment based upon mutual understanding between 
employers and employees. Let me quote one 
paragraph— I'd like to quote many more: 

" Industry to-day is drudgery for the average 
worker— perhaps the great impulse toward in- 
dustrial democracy is the desire to break the 
bonds of irksome work and restore a condition 
where labour will be a pleasure and not toil. In 
the face of this aspiration, which has been work- 
ing in industry for a century and has cut the 
average working hours in two, what reason can 
support the demand that we must work longer 
hours? The unanswerable argument is ' it can't 
be done.' We cannot run counter to the great 
forces operating in industry." 

When I read this, and some other things in 
these books, I looked again to see if they were 
not labour journals: and then I thought of 
running out and calling in the secret service 
officers who were then engaged in raiding homes 
in Gary and capturing revolutionary literature. 
I thought Judge Gary at least ought to know 
what was going on inside his offices! 
The publications I saw thus at random were 





expressions of a great movement within industry 
itself to improve human relationships. Quietly, 
but strongly, in the last dozen years has grown 
up a new interest in management: schools of 
management; a science of management and a 
new profession, the specialist in industrial rela- 
tionships, have come into existence. These men 
are close to the problem itself and really know 
the situation. Financial and business heads of 
great corporations have often got very far away 
from the human problems of the mills: but these 
men are trying to get back again. They are the 
men most responsible for production and for 
the smooth running of the shops. Yet they are 
relatively low-paid men, especially in the great 
corporations. Their true interests are often 
quite different from those of the bankers and 
capitalists who control the industry. One some- 
times hears urged the necessity, if we desire 
greater activity and enterprise in industry, that 
capital be better rewarded. There are a number 
of old ladies in a town I know who hold stock in 
the United States Steel Corporation. If you 
rewarded them with five times the dividends they 
now receive I suppose production of steel at 
Pittsburgh would not be greatly increased. But 
if you were to reward the managers and the 
men who are on the job, no doubt there would 
be an increase in production. 


I) di> 


Here, in short, is a great new field, full of 
life and suggestiveness, which I hope to develop 
more completely in other chapters. There are 
at present in both large and small industries— 
but mostly in small industries— a great number 
of hopeful experiments in human relationships 
I between owners, managers and men: not only 
the familiar collective. bargaining between unions 
and employers, but many other arrangements, 
including the shop-committee system, profit- 
sharing, arbitration boards and so on. No one 
of them is a " solution "—all of them are hope- 
ful experiments. 

I divided the labour movement in America 
into three great groups : the employers fall also 
into three groups. 

1. The conservative capitalists of the Gary 
type in whom the old individualistic impulse is 
still very strong. They are often men who 
represent, as Gary does, the financial side of 
the industry rather than the technical side. 
They do not come closely into contact with the 
human side of the labour problem. 

2. The great mass of employers, like those in 
the building trades, the railroads, and in many 
industries, who accept the principle of labour 
organization and bargain collectively, not be- 
cause they like to— though many now think it 
the best and easiest way out— but because they 




must. Labour demands it and is strong enough 
to enforce its demand. Some of the great inde- 
pendent steel masters hke John D. Rockefeller, 
Jr., have come a long way into the camp of the 

3. A group I should call the radicals if there 
were not such a curse upon the name. These 
are men of the new „m§nagement:e^^ 
tjpe who try to look at industry from a scien- 
tific point of view, who want to know the facts, 
and are as much interested in the human m achine 

••"iiiiilwiliiiiiiiiKli. iiiiiiiii III.. iijiLjiiiiiiiM, ,1111, mi, -.-Jliiiit 

as m the power-plant or the dynamos. They see 
m some kind of understanding and co-operation 
between management and men the o nly solution 
of industrial problems. They do not deal with 
the men because they are forced to, but because 
they want to. They think harmonious relation- 
ships in a factory will produce more steel, shoes, 
sugar, than continual strife and suspicion. And 
a surprising number of these men are trying to 
practise what they believe— and some of their 
results are most interesting. 


Awakening of the Public to the Industrial 


HEN I was in Chicago a man with 
whom I was discussing the indus- 
trial problem suddenly asked : 

" What are you going to do about me? " 

" What do you mean? " 

" Well, I'm the Innocent Bystander. I'm the 
man who gets the brick-bat intended for one of 
the belligerents. I'm the Public. Whatever 
happens I get hurt." 

I have dealt in former chapters with the atti- 
tude of various groups of employers and em- 
ployees toward the present industrial unrest. 
It is now important to consider the point of 
view of the " great third party." The awaken- 
ing of the public to the seriousness of the present 
unrest, its threat to American institutions, is, in 
some ways, the greatest news in the whole situa- 

We are in the midst of a sudden, powerful, 
and, at present, crude reassertion of public 
rights. It is as though the American giant had 
suddenly awakened — or just returned from war 





overseas!— and finding disorder all about, had 
acted with terrific force and directness. It is 
the American way — ^we may not at all approve 
it, but there it is ! — to act first and inquire about 
it afterward. I recall a saying of the early 
days in the north woods, when the lumbermen 
first went in: " Cut the trees, ask about the hues 
afterward." There is much of this spirit still 
left in America. 

So we have pounced right and left upon dis- 
turbers — with httle inquiry and less understand- 
ing—tossed one handful of them back to Russia 
and evidently propose to toss still others. No 
one knows the number of thousands — or the fleet 
of ships required to take them! A stupendous 
business ! We have raided the offices and homes 
of both wild and tame radicals, sometimes with 
legal authority and sometimes without; we have 
choked off radical orators; turned out radical 
members of the legislature and now propose the 
most sweeping and drastic legislation in the 
world for dealing with disturbers. One bold 
stroke at what seemed a threat to public rights 
and public order — the pohce strike at Boston — 
has made a presidential candidate! 

It is not the way they do it in England : nor 
yet in France: it is our way: and must be so 
accepted and dealt with. 

It is our way: and behind it, ruthless as it is, 



and little as many of us can approve the methods 
employed, there is a deep instinct that the self- 
ish forces of cliques, groups, interests, in Ameri- 
can life have grown too strong: and that " there 
must," as one leader expressed it, " be some kind 
tit of a new deal." 

The causes of the present disorder and unrest 
reach far back and deep down : the war merely 
accelerated developments already under way. 
At the bottom lies the popular discontent, which 
has been growing for years, with the economic 
arrangements of society : a feeling that they are 
unjust and undemocratic: a feeling that while 
there have been enormous developments in ma- 
chinery and business organization, the social and 
political structure has not kept pace with them. 
This feeling is not pecuhar to America: it is 

Some one has said that the greatest invention 
of the " Wonderful Century " was not the steam 
engine, or the dynamo, or wireless telegraphy, 
but that extraordinary and potent device, im- 
restricted social organization. 

Groups everywhere that felt oppressed, or 
wanted protection or privilege, organized to get 
it. Capitalists organized, combined, trustified 
—and succeeded beyond the dreams of avarice. 
Labour organized and became powerful. Pro- 
hibitionists organized and dried up the country. 



Women organized and got the vote. Voluntary 
social organization has for the last twenty-five 
years been humanity's magic wand. It would 
do anything! It has built up a wonderful tech- 
nique of its own: it knows how to get money, 
use propaganda, influence elections, force legis- 
lators. It is a wonderful tool — used sometimes 
for good purposes : sometimes for wholly selfish 

Consider more specifically labour organiza- 
tion. I remember well the little, dismal, smoky 
rooms over saloons that used to represent the 
typical labour union headquarters of twenty-five 
years ago: I thought of the contrast the other 
day when I visited the fine hall — it cost several 
hundred thousand dollars — built by the Street 
Car Men's Union of Chicago. 

Once the movement demonstrated its success 
in improving the conditions of life for working- 
men — and it was the only way they had — it 
spread like wildfire. I was amazed the other day 
to look at the list of unions affiliated with one of 
the principal city central bodies : school-teachers, 
actors, newspaper writers, architects, nurses. 
They are all coming in. Public employees are 
coming in: policemen, postmen. The movement 
is even penetrating the rarified atmosphere where 
authors and college professors are supposed to 
dwell. I received a communication the other day 




from the Authors' League, of which I am a 
member, that read strangely like many a trade- 
union document— only the Pants Makers and 
Hod Carriers have had longer experience and 
know better how to do it. We authors have 
gone at the business in our " labour union " of 
standardizing contracts, making better terms 
with our employers— the predatory and shame- 
fully plutocratic publishers !— and working for 
more pay and better living conditions. 

" As a result of six years of unremitting ef- 
fort," remarks this document, " the author en- 
joys a new standing and a greater security than 
at any other time in the history of the profes- 

You see what our union does! We're better 
off than ever Shakespeare was: or Dickens or 
Thackeray, or Cervantes, or Goethe. We're 
securer: we have a new standing: and organiza- 
tion did it! 

As I say, this tendency toward group organi- 
zation has gone to great lengths in our society. 
It has been a powerful centrifugal influence, dis- 
integrating our life into thousands of small, 
warring groups, societies, factions— each seeking 
its own advancement, its own security, regardless 
of anything else. This has applied to both em- 
ployers and employees. 

One reason why political life has reached such 



a low ebb in America — ^why politics attracts so 
poor a quality of leadership — ^is because vital 
men who really want something done feel surer 
of getting it through outside organizations, than 
through the indirect and cumbrous machinery of 

In its essence this strong, crude impulse 
toward a new public order represents a power- 
ful reaction from these disintegrating tendencies. 

For years we were hammering selfish capital- 
istic organizations — we are still at it — and now 
we are hammering labour organizations. We 
don't want either Gary or Gompers to boss us: 
to control our lives, or force their will upon us. 

We have had one or two recent object lessons 
of stunning force. The entire 110,000,000 of us 
have seen our business paralysed, our production 
cut off in the steel industry because Gary and 
Gompers could not agree. The 110,000,000 of 
us have suffered still more acutely because 400,- 
000 of us who are coal miners stopped producing 
a basic necessity of life. There was never before 
in America such an acute demonstration of 
group interest against public interest. No won- 
der the American giant is angry — blindly angry 
— and beats about in a kind of berserkian rage 
— not at all particular as to what heads he hits, 
or how. 

If this rage, however, were the only expression 


of the public interest the outlook would be dark 
indeed. But it is not. While there are power- 
ful forces using the fine burst of passion for 
a " new deal," for " public rights," for " law and 
order" in America to serve their ovm selfish 
interests: using it as a smoke-screen to conceal 
their own purposes: there is, it seems to me, a 
new sense abroad tha,t law and order must be 
based upon a real understanding of the new 
conditions and upon a solid foundation of jus- 

Never before has there been such a number of 
inquiries from all sides and by all kinds of 
organizations: or such a desire to get at the 
truth. We have had government inquiries — 
one of them the President's Commission — which 
have aroused unusual public interest. It is 
nothing that the President's first commission 
failed: at least it failed dramatically, with the 
protagonists of the opposing issues clearly re- 

On what may be called the side of the capital- 
ists the awakening is marked. The other day, in 
the office of one of the notable figures of Wall 
Street — ^where one would least expect to find 
such a sentiment-I saw framed and hanging 
on the wall this quotation from a speech by Mr. 
Asquith, delivered in January of last year 
(1919) : 


The old system has broken down. War was its final 
declaration of insolvency. New factors are at work. 
Science not only has not said her last words but is fairly 
to be described as stiU only lisping the alphabet of annihi- 

Organizations such as Chambers of Commerce 
and Merchants' Associations have been working 
on the problem. They all begin with the as- 
sumption that the old system is at least cracking, 
if not, as Asquith says, broken down: and that 
new methods must be devised to meet the situa- 
tion. I have before me, for example, the report 
of the Merchants' Association of New York, 
which attributes the difficulty to the greed and 
blindness of both groups— labour and capital— 
and suggests the following remedies— which are 
very different in tenor from those which would 
have been recommended by a similar organiza- 
tion a few years ago: 

The recognition by both employers and employees that 
the determination to achieve national prosperity rather than 
to enforce maximum selfish returns should be the con- 
trolling motive in industry. 

The establishment of a recognized and permanent method 
of conference between the employer and his employees. 

The limitation of the economic law of supply and de- 
mand as a basis of labour policy by the utilization of a 
more human doctrine. 

The Chamber of Commerce of the United 
States has also made public the careful report 



of a committee which lays down thirteen 
"principles of industrial relations." Among 
these principles are the following: 

The public interest requires adjustment of industrial 
relations by peaceful methods. 

The right of workers to organize is as clearly recognized 
as that of any other element or part of the community. 

Industrial harmony ai;id prosperity will be most ef- 
fectually promoted by adequate representation of the 
parties in interest. 

The Church, which represents a great con- 
servative opinion in America, is moving as never 
before; trying to understand and meet the new 
conditions and problems. In one church I know 
on a recent Sunday morning one large men's 
class discussed " The Relation Between Wages 
and Production," another was studying Proffs- 
sor Rauschenbusch's book on social problems in 
the light of Christian teaching, and a women's 
class was considering " The Health of the Com- 

One great church movement has been spend- 
ing tens of thousands of dollars making an in- 
vestigation of the steel strike: and one need only 
refer to the Social Reconstruction Program 
of the Federal Council of Churches in America 
and the pronouncement of the Catholic War 
Council of the United States to be convinced 




of the deep and serious interest of the churches 
in this problem. 

In a recent statement the Unitarian Church of 
America says: 

" The claim to a more equitable distribution 
of the profits of industry is not only clamorous, 
but just." 

A sense that the old system is unjust and 
needs revision permeates all groups of our 
society. A prominent business man took from 
his pocket the other day and read to me this 

The rapid growth of great cities, the enormous masses 
of immigrants (many of them ignorant of our language), 
and the greatly increased complications of life have created 
conditions under which the provisions for obtaining jus- 
tice which were formerly sufficient are sufficient no longer. 
I think the true criticism which we should make upon our 
own conduct is that we have been so busy about our indi- 
vidual affairs that we have been slow to appreciate the 
changes of conditions which to so great an extent have put 
justice beyond the reach of the poor. 

"What Bolshevik said that?" he inquired; 
and answered his own question, " It was Elihu 

He was quoting from a new and exhaustive 
study of the " present denial of justice to the 
poor," made by so respectable a body as the 
Carnegie Foundation. 



Not only public and business and religious 
bodies are profoundly awakened, but labour 
groups as well. 

Labour is learning that it has public as well 
as special interests, that to a large extent it is 
the public. I heard a speech at the convention 
of the Labour Party at Chicago in November 
by Glenn E. Plumb, whose name is connected 
with a new plan, the Plumb plan, for railroad 
control. He set forth the new situation in a 
way which seemed to startle some of the labour 
leaders there assembled. He said that in the 
early days of organized labour craft groups 
could get together and by organization force up 
wages, the cost of which the employers promptly 
passed along to the public. But what is the 
public? asked Mr. Plumb, and went on to show 
that a large majority of the pubhc was made 
up of wage-earners or wage-earners' families, 
so that when a strong union got a raise in wages 
most of it was paid by other wage-earners. As 
more and more labour organizations got into the 
field, the more wages were forced up, the faster 
grew the process by which increasing wages for 
one group chased up the living costs of all the 
other groups. 

He might also have said, but did not, that not 
only increasing wages, but lessening production, 
whether caused by the limitation of output by 




labour unions, the inefficiency of employers or by 
strikes or lockouts, had to be met by the public, 
a majority of which is also wage-earners. In 
short, we are all the public toward each separate 
greedy group, whether of workers or em- 

Mr. Plumb's idea is that there has got to be a 
" new deal, a new arrangement of society " ; he 
has a " plan " for working it out, so has the new 
Labour Party, so have the socialists. I am not 
here entering into the merits or weaknesses of 
any of these plans or proposals, whether coming 
from labour or capitalistic organizations, of 
churches or other public bodies, but calling at- 
tention to them as evidences of the wide awaken- 
ing to the seriousness of the problem and the 
effort to grapple with it. 

A new note was also prominent in the so- 
called " bill-of -rights " issued by a group of 
119 union leaders at Washington on December 
12, 1919. There is a clear attempt to meet the 
new pubhc criticism of labour organization, 
especially regarding productivity and efficiency, 
by the proposal of new remedies for the organi- 
zation of industry. No group, any longer, dares 
leave the public out of account. 

All this groping for a better imderstanding 
of conditions: this assumption on all sides that 
there ought to be more justice, more democracy 


in our industrial relationships — ^however uncer- 
tain yet of specific applications of new remedies 
—is surely the most hopeful element in the 
present unrest. 


Approaches to a Solution of the Problems 

— BY Americanization, as Suggested 

BY THE Employers 

THE clear recognition by the public, as 
well as by the parties immediately con- 
cerned, of the present conditions of 
industrial unrest, and the real danger to America 
inherent in them, is surely the best foundation 
for making a new start. It is surprising, the 
number of associations, both voluntary aiid 
representative; religious, social and political 
organizations, and trade groups, as well as indi- 
viduals, now at work upon the problem in some 
of its aspects. Many plans, schemes, panaceas, 
are being suggested: many experiments being 
tried. Some show great labour: some repre- 
sent patient investigation: some shoot wholly 
wide of the mark: some reveal little or no knowl- 
edge of real conditions. But their significance 
lies in the exhibition they give of sincere desire 
to meet the situation in some constructive way. 

We know that we are in trouble. 

We have the desire and the will to find a way 

n i 



What we lack are clearness and unity of pur- 
pose in seeking a remedy. 

Three main ways of approach to a " solu- 
tion" present themselves: 

First: that of the extremists on both sides: 
the "shoot 'em down" program on the part 
of the intolerant employer: the " blow 'em up " 
program on the part of the intolerant worker. 
Either way lies perdition. 

Second: that of a great mass of employers 
and employees— and of the pubhc as well— who 
see the problem dimly (or some part of it) and 
who want really to find a constructive solution, 
but who think it can be reached in some large 
general way. They want a quick, wholesale 
remedy that won't hurt much, or cost much, or 
take much time. They do not yet understlnd 
how deep-seated, of how long duration, how 
chronic, the disease has become. For example, 
it appears vividly to some employers that in the 
recent great strikes most of the trouble was 
caused by " foreigners," by " aliens," and " alien 
ideas." They do not follow the extremists in 
demanding instant suppression and deportation, 
but they do jump at what seems to them a ready 
and wholesale remedy: "Americanization." 
Americanize these workers and you cure the 

On the part of the workers there is a similar 


I w 



example of the desire for a broad general 
remedy. They believe that much of the trouble 
is due to unjust laws, the oppression of judicial 
injunctions, outworn political methods, and pro- 
pose a new pohtical party which will overturn 
the old system, or parts of it, and construct a 
new one by law. 

Third : the third group is a much smaller one 
as yet, but it is made up of those employers and 
managers and men who are beginning to see the 
depth and width and length of the problem, and 
whose approach is based upon the patient 
method of scientific inquiry guided by a spirit 
of genuine goodwill. They strive to know all 
the facts and to get at a real cure, through 
steady day-by-day practice and experimentation 
in shops and factories. These are the men actu- 
ally on the ground, not distant financiers, nor 
distant labour leaders, nor distant theorists. 
These are the men who must get at a modus 
Vivendi or be ruined. The work that some of 
these good-will employers and managers are 
doing is as fine and high as anything to be found 
in this world to-day. 

Now, in this chapter and the next, in order to 
get at least two of the more general remedies out 
of the way first, I will take up the subject of 
the present campaign for Americanization as 
suggested by the employers' end of the con- 



troversy: and political action as suggested by 
the workers. Both are valuable movements : our 
foreigners do need " Americanization " and need 
it badly: and the workers do need political ex- 
pression: but we must understand thoroughly 
what is implied by each movement and how far 
it is intended to go with it. In the following 
chapters I shall exhibit some of the more inten- 
sive and scientific experiments and try to show 
how far each is effective in meeting the trouble 
—for example, welfare work, the shop-commit- 
tee system, the method of continuous negotiation 
and arbitration as remarkably practised in the 
clothing industry, the new science of manage- 
ment as stimulated from the employers' side, 
and the new impulse toward co-operative enter- 
prises among the workers. 
^ Consider now the subject of " Americaniza- 
tion." I know of a meeting held not long ago 
by a group of business men in New York City 
to discuss this problem. They were deeply con- 
cerned about it. The suggestion made in all 
seriousness by the principal speaker was that 
a certain number of those present contribute 
enough money to have a large number of 
copies of the Constitution of the United States 
printed and distributed. He said that there was 
a Bible in practically every hotel-room in 
America: there ought also to be a Constitution, 


People must get back to the sources! At an- 
other meeting I know of a speaker suggested a 
wide advertising of American principles in the 
newspapers: said that it had been already 
adopted with great success in one or two cities. 
Another plan provided for a resurrection of 
the "four-minute men" who spoke so effec- 
tively for the liberty loan campaigns during 
the war, in which American principles would 
be presented in theatres, schools and so on 
—in four minutes! Other proposals, many 
of them very valuable so far as they go, pro- 
vided for the wide teaching of the English 
language in night schools, shop schools and 
the like. This is actually being done in many 

I know of one plant in Milwaukee, a tan- 
nery, where 406 foreign-born employees recently 
completed nine weeks instruction in the English 
language, speaking, reading, writing and arith- 
metic. They had an hour every day for five 
days each week on the company's time and with- 
out loss of wages. The results were excellent. 
There are said to be 500 industrial plants in 
America where work of this sort is being carried 
on. It is not only good for the workers but it 
pays the employer to have a "one language 
plant." Certain cities like Cleveland have begun 
serious campaigns to teach English to foreigners 


and there has been a wide revival of interest in 
night schools and adult schools. 

There have also been many proposals to for- 
ward the same end by law. In its report, after 
myestigating the steel strike, the Senate Com- 
mittee recommended a change in our naturaliza- 
tion laws to require " some education of all 
foreigners, at least to the extent of speaking the 
American language,"' and providing that if they 
do not acquire this knowledge within five years 
after their arrival they may be deported. 

All of these suggestions, though some of 
them indicate an extraordinary failure to visual- 
ize the stupendous nature of the problem they 
are attacking so lightly, are significant of one 
great fact— and this is the conviction that the 
" melting-pot " idea of America has failed, the 
idea that merely being in America was enough, 
by some kind of magic hocus-pocus, to turn vast 
numbers of foreigners of old and resistant races 
into good Americans. 

Consider this famih'ar and yet always startling 
fact, that in the last twenty-two years since 1897 
—the period of the greatest expansion of Ameri- 
can industry— over 15,000,000 immigrants have 
come to America. Twice as many people as 
there are to-day in all Canada! A stupendous 
migration I Unlike the eariier immigrants, who 
distributed themselves more evenly throughout 



the nation, these later peoples have tended to 
settle in indigestible lumps in the industrial 
regions. Foreigners largely dominate the great 
basic industries of the nation: coal, steel, oil, 
textiles, the packing-houses and the clothing 
trades. We have been so confident of the magic 
of the melting-pot, so busy making money, that 
we were bhnd to the fact that instead of trans- 
forming these masses of foreigners, American 
institutions were being transformed by them. 
After an investigation of certain conditions in 
the textile industry eight years ago I wrote: 

American workmen with American standards have 
largely disappeared from the textile industry, and even 
the solid English and Scotch workers are now flying before 
the immigrants from southern Europe who can, or will 
attempt to, exist on lower wages. The tendency is all 
toward grading downward. The danger is that these 
low-living, hopeless conditions will become the established 
mode of life. They may become the typical American 

There is, indeed, much to be done with educa- 
tion, with the teaching of English, with instruc- 
tion in American ideas, but these things barely 
scratch the surface of the problem. 

" When we get them so that they can under- 
stand us," asks one critic pertinently, "what 
are we going to say to them? " 




Americanism has got to be learned as the 
original Americans learned it, by practice, by 
great freedom to talk, to read, to associate. One 
great fount of Americanism was the New 
England town-meeting; representing free asso- 
ciation, free discussion, common effort. But 
the masses of foreigners in many industries are 
prevented from having either free associations 
among themselves to * affect their own lives, or 
free association or co-operation with the manage- 
ment to make industry more efficient and p^- 
ductive. And in some cases the conditions of 
their employment are such that they could not 
possibly avail themselves of such agencies of 
"Americanization" if they had them. 

I met a Serbian steel workers at Gary, who 
said to me passionately: 

" They accuse us of not becoming Americans. 
When do we get time? Can a man working in a 
blast-furnace— and anybody knows that ain't 
no boy's job — twelve hours a day, or even ten 
hours, get time to learn English — or learn any- 
thing else? What in hell do they expect of us? " 
They have, indeed, night schools in Gary 
and in other steel centres, but as one teacher 
told me plaintively, not many come for very 
long. "They can't keep awake," he said. 
Father Kazincy, a Polish priest in Pennsylvania, 
bitterly complained of the long hours and Sun- 



day work to the Senate Committee because his 
people could not "have any religion." He 
said regarding the Americanization schools : 

" They are not a very great success for the 
simple reason that the men are overworked and 
they do not feel like going to the schools and 
depriving their families of their company after 
these long hours. Sundays they have none, 
for most of them go to work." 

In spite of all the faults and excesses of 
labour unionism — and they are many — I think 
no one who studies the situation honestly can 
escape the conclusion that it is one of the very 
greatest of all agencies of Americanization for 
these foreigners: for here they really practise 
free association, free speech, free action. Union- 
ism to-day is almost the only agency that is free 
from any distinctions of " race, colour or previ- 
ous condition of servitude." I once investigated 
a strike among the clothing workers in New 
York. I found in the union Jews, Americans, 
Germans, Italians, Lithuanians, Poles and even 
Irish and Scotch, all working together in a 
common cause. No other force tends more 
strongly to secure the amalgamation of these 
diverse peoples or to inspire them with a com- 
mon public opinion than these unions. To-day, 
I believe the unions in the clothing industry in 
America which are now co-operating fully with 





the employers, are doing more to hold their own 
radical elements in check— by the force of their 
own inner public opinion— than any policy of 
outside force and deportation on the part of the 
government could possibly do. 

The American elements in our population are 
fully as much in need of training in American- 
ism as most of the foreigners: for Americanism 
is not a language, or a flag, or even a constitu- 
tion, but a certain free and generous point of 
view. It is a spirit: an attitude toward hfe: a 
full acceptance of the idea that all men should 
have free opportunity for the development of 
the best that is in them. It cannot be given 
from above: it has to come from within. It 
cannot look upon any man as a mere cog in a 
machine, as do those who believe in the com- 
modity theory of labour, nor yet as a machine, 
as the early and orthodox scientific managers 
seemed to do: but he must be considered as a 
human being. And in the larger part of Ameri- 
can industry to-day this kind of real American- 
ism is denied the workers and denied them by 
Americans. It is the great fundamental error 
of our system. 

There must be, in short, a real application of 
the principles of American democracy to in- 
dustry— "a full recognition of the right of 
these who work, in whatever rank," as President 



Wilson expresses it, "to participate in some 
organic way in every decision which directly 
affects their welfare or the part they play in 

Herbert Hoover expresses the same idea in 
another way: 

" The paramount business of every American 
to-day is this business of finding a solution to 
these issues, but this solution must be found by 
Americans, in a practical American way, based 
upon American ideas, on American philosophy 
of life." 

He says that the "primary question is the 
better division of the products of industry and 
the steady development of higher productivity." 
There must be a "better distribution of 
profits " : and maximum production " cannot be 
obtained without giving a voice in the adminis- 
tration of production to all sections of the com- 
munity concerned in the specific problem: . . . 
it cannot be obtained by the domination of any 
one element." 

In short, there must be more democracy in 
industry. No one autocratic element, whether 
the great steel employers at one end of the 
scale, or the radical labour leaders at the other, 
can be permitted to dominate: there must be a 
greater representation in administration of all 
the elements concerned: and there must be a 


better distribution of the products of the com- 
mon toil. This is the true Americanization of 
industry: and it is the only method by which 
production of goods, now the greatest need of 
the world, can be stimulated. 


Approaches to a Solution or the Problem — 

BY Political Action, as Suggested by 

THE Workers — The New 

Labour Party 

ONE striking product of the present up- 
heaval of industrial unrest is a new 
national Labour Party, born at a con- 
vention at Chicago in November, 1919. 

It is important to inquire, if we are to under- 
stand the present situation, just what this move- 
ment represents, who compose it, and how much 
it means. We know what a tremendous power 
the Labour Party is becoming in the politics of 
Great Britain: does this new movement presage 
a similar development in America? 

I attended the convention at Chicago, as I also 
attended the Convention of the British Labour 
Party in London, June, 1918, at which the 
widely heralded report upon reconstruction — 
really the declaration of the new general policy 
of labour in the British Isles — ^was adopted. 

Several features of the convention at Chicago 
are worthy of note. In the first place the fact 
that it was held at Chicago is significant. 




Labour is more closely organized, more self- 
conscious, more advanced in its views in Chicago 
than in any other American city. It was the 
first large city to have a local labour party: 
in the last campaign (1919) it polled 56,000 
votes for John Fitzpatrick for mayor (while 
the socialist candidates polled 28,000) out of a 
total poll of over 600,000 votes. This, then, was 
the friendliest atmosphere for such a convention 
that could be found in the country. 

It was an unexpectedly spontaneous conven- 
tion. It was run from the floor and not from 
the rostrum. It was not cut and dried. I 
think the number of delegates who came (there 
were about 900 from thirty-five states) rather 
surprised the promoters of the enterprise. A 
great many false reports were disseminated 
about it : that the convention split hopelessly on 
several issues: one of them prohibition: and 
that the delegates from the Farmers' Non- 
partisan League, with Governor Frazier at their 
head, had withdrawn. As a matter of fact, it 
was an unusually harmonious convention which 
did the work it set out to do: and Governor 
Frazier did not withdraw, because he was never 
there: and the Non-Partisan League fraternal 
delegates remained to the end. The new party 
was organized and is preparing to place candi- 
dates in nomination not only for national offices 



at the election next fall, but also to enter as 
many local and state campaigns as possible. 

Two warring attitudes toward political action 
have long existed in the ranks of organized 
labour in America. One of them is represented 
by the conservative wing of the American 
Federation of Labour headed by Gompers. 
Gompers has always fought independent politi- 
cal action: or a distinct labour party. He has 
been for the policy of working just as the cor- 
porations have always worked, as the anti- 
Saloon League, and the Women Suffrage As- 
sociations have worked: within the old parties, 
or by lobbying in Congress or legislatures, or 
by supporting this or that candidate upon a 
declaration of his views concerning certain de- 
mands of labour. He has never even been as 
advanced in his method as the Farmers' Non- 
partisan League of the northwest, which accepts 
the old two-party system, but tries to seize 
control of one of them from within — as it has 
succeeded in doing in North Dakota. 

Gompers' policy for years was attacked by the 
radical wing of the American Federation 
of Labour led chiefly by the socialists, and 
once or twice he was nearly unseated. The 
war smashed the old socialist party: but 
by no means altered the views of the left 
wing of labour regarding political action. And 


the convention at Chicago was, in reahty, the 
independent expression of these radicals. Some 
of its chief leaders, like Max Hayes and Duncan 
McDonald, President of the Illinois Coal- 
Miners, were formerly memhers of the socialist 
party. Its chief leader, John Fitzpatrick, repre- 
sents the " Chicago crowd," which, while main- 
taining their position within the American Fed- 
eration of Labour, dre more or less openly in 
revolt against Gompers and many of his poh- 
cies. The Chicago Convention was counte- 
nanced by Gompers in no way, nor did any 
national union send official delegates: the con- 
vention was a rank-and-file movement made up 
of delegates from local or central organizations 
in thirty-five states. 

The spirit of the convention was rather well 
typified by the personality of its principal 
leader: John Fitzpatrick. Fitzpatrick was born 
in Ireland, is a horse-shoer by trade, worked as 
a youth in the packing-houses at Chicago. He 
is a Catholic and a total abstainer. He has been 
for years active in the labour movement, and 
President of the Chicago Federation of Labour. 
He is a powerfully built man, smokes a pipe 
continually, is a whirl-wind orator, and much 
trusted by his following. He is an excellent 
organizer: but he represents a type of labour 
leader that is passing: the fiercely oratorical. 



denunciatory, heavy-fighting type, which came 
up doing great service in the hurly-burly of the 
early days of labour organization. He knows 
well the strategy of strikes, but has done no real 
constructive or political thinking: has no states- 
manlike plan. 

His argument for a new labour party is based 
upon the conviction — which is shared by a very 
large and growing proportion of organized 
labour — that the two old parties are controlled 
by capitahsts and Wall Street, that the courts 
are used by employers' interests to defeat the 
aspirations of labour, that public offices gener- 
ally are filled by "labour-haters"; and there 
being no justice or right to be expected from 
either of the old parties, the only alternative is 
for labour to have its own political organization. 
Fitzpatrick's speech at the convention was de- 
scribed by one of the delegates as the " groan of 
a wounded giant." Like most of the other 
speeches it was shot through with a fierce spirit 
of revolt — and there was ammimition a-plenty 
at hand for every speaker. They denounced the 
government injunction against the miners: the 
threatened anti-strike provisions in the Cummins 
railroad bill: the deportations: the treatment of 
strikers in the steel centres: the profiteers. 

The mission of the Labour Party was thus 
set forth in the resolutions; 



The Labour Party was organized to assemble into a new 
majority tbe men and women who work, but who have been 
scattered as helpless minorities in the old parties under the 
leadership of the confidence men of big business. 

These confidence men, by exploitation, rob the workers 
of the product of their activities and use the huge profits 
thus gained to finance the old political parties, by which 
they gain and keep control of the government. They with- 
hold money from the worker and use it to make him pay for 
his own defeat. , 

Labour is aware of this and throughout the world the 
workers have reached the determination to reverse this con- 
dition and take control of their own lives and their own 

In this country this can and must be achieved peacefully 
by the workers uniting and marching in unbroken phalanx 
to the ballot boxes. It is the mission of the Labour 
Party to bring this to pass. 

But when the delegates who, h"ke Fitzpatriek, 
expressed their sense of the injustices and 
wrongs that labour suflFers, came to the forging 
of a platform: a constructive policy: they ex- 
hibited the greatest possible contrast to the 
British Labour Party. Nothing had been 
thought out, or worked out. Instead of a care- 
ful, studied plan of social reconstruction such as 
British Labour adopted, their platform repre- 
sents a miscellaneous collection of remedies sug- 
gested, more or less extemporaneously, by vari- 
ous delegates. Apparently they put in every 



reform that any delegate wanted — from the 
nationalization of unused land to the abolition 
of the United States Senate. 

Certain provisions aim to reach the radical 
farmers' group, for example: 

Credits for farmers " as cheap and available as those 
afforded any other legitimate and responsible industry." 

Farmers to be assured prices for their products that 
will meet cost of production and ** a reasonable margin." 

Women's organizations are favoured in these 

Single standards of morals in enforcement of laws af- 
fecting divorce and the sexual relation, with age of con- 
sent for both sexes at 18 years. 

A wage " based upon the cost of living and the right 
to maintain a family in health and comfort without labour 
of mothers and children." 

Prohibition of labour of children under 16 years. 

Among the other planks are legacies from the 
old populist party, the " Bull Moose " move- 
ment, and planks aimed to satisfy the more 
advanced socialists and other radical groups, 
the municipal reformers and the trade unionists, 
as follows: — 

Repeal of the espionage act. 

Freedom of speech and assemblage. 

A league of nations based upon the 14 points. 


"All basic industries which require large scale produc- 
tion and are in reality upon a noncompetitive basis "—rail- 
ways, mines and forests— to be nationalized. 

Endorsement of the Plmnb plan for railroad control. 
Heavier income and inheritance taxes. 
The banking business " to be placed in the hands of the 
federal government." 
An executive budget in Congress. 

Abolition or curtailment of the supreme court's right of 
veto over national legislation. 

Popular election of federal judges. 
Guaranteed right of workers to bargain collectively. 
State or federal aid to provide land and homes for 
residents of town and country. 

Workers to have a real voice in the management of busi- 
ness and industry. 

Abolition of detective and strike-breaking agencies. 

Protection of workers from the competition of " convict- 
made, sweat-shop or child-labour products or goods brought 
from other countries that are produced by cheap labour for 
the purpose of underselling the American product." 

A maximum working day of eight hours, and a 44-hour 

Abolition of unemployment by various methods. 

Continuation of war-time soldiers' and sailors' insurance 
and the extension of such life insurance by the government 
without profit to all men and women. 

All government work to be done directly, not by 

Union label on all federal, state or local government 
supplies and materials. 

Full political rights for railroad and civil service em- 

, Home rule for municipalities. 

f I 



Amendments to the United States Constitution to be 
submitted to the direct vote of the people. 
Initiative, referendum and recall. 

Here are thirty-two planks — a mixture of 
political, economic, social and financial reforms 
— representing big and little ideas from every 
source, and intended to attract all groups of 

And yet, although it welcomes to its rank 
workers of both " hand and brain " in support of 
" the principles of political, social and industrial 
democracy" it reveals no larger vision — as do 
both the British and French labour movements — 
of broad pubhc and national needs. Take the 
single matter of large and efficient production 
which is to-day for the pubhcs of all nations 
becoming a crying issue. In both England and 
France immediate and large production are 
being recognized as truly the concern of labour 
as well as of other elements of the population. 
Here, for example, are some sentences from 
the resolutions of the British Labour Party: 

What the nation needs is undoubtedly a great bound 
onward in its aggregate productivity. But this cannot be 
secured merely by pressing the manual workers to more 
strenuous toil, or even by encouraging the " Captains of 
Industry " to a less wasteful organization of their several 
enterprises on a profit-making basis. What the Labour 
Party looks to is a genuinely scientific reorganization of the 




nation's industry, the equitable sharing of the proceeds 
among all who participate in any capacity and the adop- 
tion of those systems and methods of administration and 
control that may be found, best to promote, not profiteering, 
but the public interest. 

The French Confederation of Labour at its 
Congress at Lyons in September, 1919, also 
shows that it sees clearly the need of greater 
production, especially since the war. Its reso- 
lution says: 

To continue production in order to satisfy the needs of 
men, to increase it in order to put at the disposal of all a 
greater total of consumable wealth, these are questions to 
which the world situation resulting from the war has given 
a formidable importance. 

The labour movement affirms that it should and can an- 
swer to this appeal, but it also declares that any effort in 
this direction is irreconcilable with the maintenance of the 
present regime. That appeal to labour to which all 
labourers are ready to respond, must henceforth rest upon 
the complete recognition of the rights of labour. 

It is probably unfair to compare this young 
labour party with the much older and more 
experienced movements of Europe : but we must 
try to see exactly where it stands. It faces a 
much greater problem, in other ways, than the 
British Labour Party. Here the new party 
has not even the support of its own group, as in 
- England, for the powerful following of Gompers 



is in opposition. It thus represents only one 
wing of the labour movement. 

America is also a huge country with far more 
diversified interests than any European country. 
Here the agricultural and small-town vote is 
still enormously powerful: and the new Labour 
Party has not yet convinced even the radical 
farmers of the Northwest. While it expresses 
the old revolts it lacks as yet any flaming crea- 
tive vision or moral appeal which, in America 
particularly, is essential to any strong popular 

And yet it is plain to see that American 
workers and American farmers are rapidly 
awakening to political consciousness: to' the 
necessity of some political expression to supple- 
ment the direct economic pressure of labour and 
co-operative organizations and strikes. No one 
who talks with labour leaders or attends labour 
gatherings can avoid this conclusion. They all 
agree to it, but differ as to method. The future 
is at present largely in the hands of the old 
parties and the old party leadership. If the old 
parties offer programs of reconstruction which 
convince the labour groups as being genuine and 
honest they will hold the great masses of organ- 
ized labour now wavering between the conserva- 
tive policy of Gompers and the radical new- 
party idea of Fitzpatrick. For the whole labour 


movement in America is now. as never before 
in a plastic or fluid state. If the old parties on 
the other hand exhibit no vision of the needs 
of the new time: or if they make insincere pro- 
posals—as they have so often done in the past 
—to catch the labour vote, then the drift to a 
new radical party movement (whether based 
upon this Chicago Labour Party or some other) 
will be swift and sure. The war has made a 
profound impression upon labour— here and in 
Ji^urope-and old party leaders who think that 
labour is going back quietly to its old-time 
status are doomed to disappointment. 


The Genius of Mechanism and the Soul of 

Man— The Spihitual Aspect op 

THE Peoblem 

THIS chapter is an interlude: but like any 
weU-regulated interlude, the play can- 
not somehow go on without it. 
I should like to step out for a moment before 
the next act-like some prologue-and with 
my thumb pointed backward at the obscured 
actors upon the stage (who take themselves so 
seriously!) take you. the audience, into my con- 
ndence for a moment. 

I have ah-eady exhibited, as best I could 
some of the forces at work in the present indus- 
trial unrest, some of the leadership, some of the 
more evident and general devices of reform 
Ihe plot and the protagonists, the conflict and 
the crisis, are more or less made clear. Some- 
thing of the high theme, the motif, the spirit is 
yet wanting. ^ ' 

I can perhaps best indicate one part at least 
of the theme or the motif by describing my own 
Urst vivid impression upon visiting a steel town 

I went down to the city of Gary in a snow-' 




Storm. A cold raw wind was blowing off the 
Illinois prairies. The train was cold. The city 
I had just left behind was cold. It was cold, 
and darkened at night. Some of the factories 
were closed: the stores, although at the begin- 
ning of the hohday rush, were open only part of 
the time. I was going from a city suffering 
from a coal strike to a city suffering from a steel 

It is an hour's journey from Chicago to Gary. 
Gary is one of the magic cities of the world. It 
has to-day about 80,000 people, and broad, well- 
paved streets and fine public buildings, and a 
school system with an international reputation. 
No steel mills in the world equal in modem im- 
provements those at Gary. And yet thirteen 
years ago — as I have already said— the place 
where Gary now stands was a desolate waste of 
sand dunes. Wild ducks, flying in from the lake, 
settled in the sluggish inlet and were undis- 
turbed: foxes skulked among the scrubby oak- 
trees. One of the great steel masters, coming 
to look over the site of the future city, was 
lost among the dunes near the present location 
of the Carnegie Library. 

It was a big, free, bold thing to do— the build- 
ing of Gary. It was well and truly dreamed. 
This was the one spot, here at the foot of Lake 
Michigan, where the ore from northern ranges. 


floated down in huge, tubby cargo-boats, could 
most easUy and cheaply meet the coal from 
southern mines and be fused into steel. The 
mills could take advantage, in distributing their 
product, of the net-work of raih-oads centring 
around the southern loop of the lakes. They had 
near at hand the vast human reservoir of 
Chicago upon which to draw for their labour. 

acwlvedl *°"^^* °"*'* ^""^ wonderfuUy 

J.r^'l^. ^^^ °°* ^^°"^ ''^«^»«e it ^as one 
ot the chief centres of the steel strike, but be- 
cause among all the cities in America, the entire 

itedf. " '''^"^ °°'^^^''^ """"^ ^'"^^^y P^^^^°t« 

Consider what an opportunity this magic city 
offers the observer. For here industry has had 
a clear field: no limiting traditions, no restric- 
tions. Here, if anywhere, American industry is 
to be seen exactly as it most desires to be seen 
It has had scope and space, unlimited money* 
time, power-every ingredient for miracle-mak- 
ing-to give form and fashion to its utmost 
dream. Here we have it, then, at Gary-the 
hfe-hke portrait of American industry, deline- 
ated by its own bold hand. 

Let us look at it narrowly: for like any great 
masterpiece, it is as enlightening for what it cun- 
ningly conceals as for what it easily discloses 

■ 'l 


There is character here, certainly, a kind of 
stark power, a kind of bold originality. " Huge 
and alert, irascible yet strong." Is it grim? 
Well, Vulcan is toiling at his blazing forges. 
Is it benevolent? Is it cruel? And is there 
not something strange about the eyes? Is it so 
nakedly American that we should hesitate to 
draw the curtain and exhibit it to a visitor from 

I had confidently expected when I went to 
Gary to be chiefly interested in the men and 
women there: the workers, the bosses, the ob- 
serving newspaper editors, the merchants, 
lawj^ers, teachers: but curiously I was not. I 
went, indeed, first of all to see the men of the 
town, many of them hot with the passions en- 
gendered by the strike, I saw the unexpectedly 
comfortable homes of the skilled workers, and 
the wonderful schools, and the library, and the 
post-office, and the Y. M. C. A. building. I 
sat with the strikers in the dingy coop they called 
headquarters. I talked with mill officials and 
watched with some wonder the soldiers who 
were protecting the town — but everywhere I 
went, during every moment of the time, the 
centre of the scene was occupied with the 
stupendous spectacle of the mill. Its tall, slim 
stacks, plumed with strange-coloured smoke, 
its broad-shouldered blast furnaces, its portly 


ore-piles, dominate the town. At night the 
flare of its converters signal the very heavens: 
and no one can escape the sound of its brazen 

When I had been inside the principal mill, 
and had seen with my own eyes those titanic 
processes, had watched the blazing white metal 
pouring from the Bessemer converters, had 
looked through smoked glasses into the boiling 
hell of the open hearth furnaces, had seen the 
steel ingot hfted by iron fingers from the heating 
ovens and rolled with easy power into steel- 
rails— when I saw all this, the impression of 
dominance was immeasurably increased. 

As I saw it that stormy December day, just 
at dusk, it seemed a kind of titan, dwarfing all 
the human life around and within it. So few 
men were to be seen, or they were so insignifi- 
cant, so dim, compared with the stupendous 
machinery, that one barely noticed them. The 
mechanism appeared, somehow, to be operating 
itself. I can scarcely describe it : but there it 
was, a kind of monster squatting on the shore 
of the grey lake. A tireless monster that never 
sleeps! Regardless of disputatious workers, and 
capitalists, and economists and politicians, it 
toils day and night, summer and winter, Sun- 
days, Christmas, the Fourth of July. Its appe- 
tite is unappeasable. Thousands of men, dig- 


ging for their lives in the iron-ranges of Minne- 
sota and thousands more in the coal-fields and 
quarries of Indiana and Illinois can scarcely 
keep it satisfied. It drinks the entire flow of 
a river. It requires 10,000 men at Gary alone, 
speaking a babel of twenty languages, to serve 
the intimate daily necessities of a single mill. 

Each time I visited Gary these impressions 
deepened. More anfl more I seemed to feel the 
implacable power of the mechanism there at the 
lake: and, in comparison, the insignificance of 
the human element in the process. One evening, 
as I was going out along the high embankment 
from which one can glimpse the whole enormous 
aggregations of flaming chimneys and spread- 
ing mills, it came to me, that, in its essence, man- 
kind was facing the problem as to whether 
machinery should dominate men or men ma- 
chinery. Were men to be merely cogs or 
servants of stupendous insensate mechanisms or 
were they to stand out as masters, using easily 
and freely the tools they had built? Was the 
"genius of mechanism," as Carlyle expressed 
it long ago, to sit forever " like an incubus upon 
the soul of man," or was the soul of man to free 
itself and command the genius of mechanism? 
I think many an observer, visiting these great 
industrial towns will have the same question 
vividly presented to him: and he will begin 



straightway to try, with all his power, to see 
whether or not the soul of man is really domi- 
nated by the mechanism, and why it is — and how 
it can come free and triumphant in the struggle. 
For this is the true theme, the motif, of this vast 

Yet the more I looked at Gary, and its mills 
and its men, the more I thought about them, 
the more amazing, after all, it seemed that these 
Uttle insects of human beings should be there 
at all, that they should have been able, somehow, 
to create such a stupendous mechanism, such a 
titanic iron slave, and that having created it 
they should be able to command for its service 
so many of the forces of nature— heat and cold, 
air and water, electricity and gas — that they 
should know where to find all of the varied in- 
gredients and bring them together exactly on 
time, mix them accurately, and produce finally 
such an outpouring of fashioned steel. 

I went into the immense room, larger than 
any cathedral, where the ingots were being 
rolled. All the machinery was powerfully at 
work — and no other mechanism created by men 
gives a subhmer impression of resistless power 
than a modern roUing mill— but nowhere at first 
did I see a single man. Not one! It was almost 
uncanny! Presently I looked up. There, in a 
partly glassed cage high on the wall sat the 


worker among his levers and his buttons: the 
cerebellum of the creaturel After all, it was 
managed by men! 

A moment later it came to me with a flash, 
exactly what the trouble was. Yes, men actu- 
ally controlled the monster, but they quarrelled 
with another about it: there was a divided spirit: 
there was no common purpose I They were 
crippling the willing slave of them all, who was 
toilmg to give them bread and clothing and 
shelter— and whatever of books, education and 
culture they might be able to acquire. There 
were actually soldiers patrolling the streets and 
guarding the mills to prevent them from kilhng 
one another, or from injuring the monster. 
They had built a marvellous machine— and were 
threatening to break it up because they could 
not agree about managing itl 

Nor was this cripphng confined merely to 
times of open strife. If that were all, we might 
speedily find a remedy. But it was going on 
all the time: there was no real co-operation: no 
true unity of spirit. A scientist in manage- 
ment, Mr. Gantt, after a life-time devoted to the 
study of industrial plants, gave it as his mature 
judgment that on the average the manufacturing 
capacity of this country was not more than 
twenfy.five per cent, of what it ought to be if 
the productive machinery were properly man- 



aged. A part of this was due to inefficiency of 
the management: and part due to the slack- 
ness and want of interest of the workers. Think 
of it! A slave willing to do four times as much 
work as it is doing — but crippled by confusion 
in the control! 

Some other extraordinary features of this 
situation at Gary flew to my mind. In the back- 
streets of the town, unhappy groups of the most 
ignorant of the workers were meeting — ^men who 
cannot speak English — men that no one pays 
any attention to so long as they come to work 
every day. No mill in the country has a higher 
reputation for neatness and good order than 
the great mill at Gary. Gleason, the superin- 
tendent there, hates dirt, waste, rubbish, and will 
not abide them. He thinks them unsightly and 
dangerous! And yet they leave this human 
wastage neglected in dark corners of the town 
and wonder that it flames up in spontaneous 

Well, these ignorant foreigners — ^they have 
never, for the most part, been organized in 
unions at all, — hold their meetings. They feel 
that something is wrong in the mills. It is in 
the very atmosphere. Some of them, perhaps, 
have read pamphlets dealing with European 
revolutionary movements. Everything is there 
so clearly explained. Nothing is more beguiling 





to ignorant men than a patent remedy, whether 
for body or mind. They want a quick cure, and 
take it instantly. In the early days of the strike 
some of these men quite frankly advocated the 
immediate seizure of the mills by themselves— 
the workers! 

No one has explained anything to them, or 
tried to: no one, so far as they know, has tried 
to remedy the conditions under which they feel 
that they suffer. 

Nine hundred miles away from all this in New 
York sit the commanding men of the steel 
industry. They have given the workers of the 
town much good housing, and cheap, they have 
provided safety apphances at the mills— really 
in a wonderful way— they have instituted a 
pension fund, and they invite the workers to 
invest their savings in the stock of the corpora- 
tion on a helpful and generous basis. 

" See what we are doing for them I " they tell 

It seems like black ingratitude that workers, 
after all this, should strike I Twenty-five years 
ago I saw men and women hungry in the model 
homes of the town of Pullman during the great 
strike there. Mr. Pullman had done everything 
(he thought) for his workers: and he mourned 
like some Lear over the tragedy of their in- 



Well, those things do not prevent strikes, and 
never have; and never will, for they do not 
touch the heart of the trouble. 

I puzzled a long time at Gary, how best to 
describe the real trouble — how to express it. 
I am not presumptuous enough to imagine I can 
explain it all, but one thing, at least, I think I 
see clearly. In the earlier part of this chapter, 
speaking of the self-delineated portrait of in- 
dustry as it is to be seen at Gary, I referred to 
a certain strange aspect of the eyes. I know 
now: and feel like whispering the truth. Blind! 
No vision — or clouded vision. They do not see 
what the real struggle is: they do not unite to 
meet it. 

For a little while last year — that wonderful 
year when our soldiers were in France — Ameri- 
can industry opened its eyes : looked up ! Both 
sides nearly forgot they were working for 
money : they forgot long hours : they even forgot 
profits (some of them!) ; they forgot to quarrel; 
they were united. For once they made the 
monster-slave of mechanism sweat at his task. 
For they had a vision of ships plying the 
Atlantic loaded with American soldiers, of a 
railroad across France, of guns for our 
brigades to fight with. How they all worked 
and produced for that clear purpose! The 
eyes of the whole world watched with admira- 


1(^1 1 



tion how we turned out ships and cars and 

All that has gone now. We had a glimpse 
of a better way, we tried uniting to depose the 
genius of mechanism which sits upon our souls, 
tried working together for a high purpose, we 
achieved miracles — and are back again groping 
in the old murkiness, quarrelling with one an- 
other, and crippling the giant that feeds us. We 
could unite, and produce, and sacrifice, to pro- 
tect the nation from a danger from without : we 
seem to have no appreciation of the danger 
within, no vision of the task of meeting it! And 
where there is no vision the people perish. 

Not long ago I read in an account of a re- 
cently discovered manuscript of the New Testa- 
ment a remark of the Master to a shoemaker 
at work: 

" Man, if thou knowest what thou dost, blessed 
are thou, but if thou knowest not, thou art con- 

It is a very wonderful place— Gary— an ex- 
traordinary demonstration of the sheer genius 
and energy of hmnan beings, but one wonders, 
having been there, having seen the crippled mills! 
the dissatisfied workers, the irritated manage- 
ment, the fearful losses in production, wages, 
profits, the soldiers patrolling the streets with 
charged arms, and groups of revolutionaries 



plotting disturbances, and groups of officials 
planning suppressions — one wonders if those 
who manage and those who work at Gary do not 
warrant the condemnation of not knowing what 
they are about. 

And yet having said this of Gary, I have said 
too much for industry in general, for there is a 
new vision coming in industry; new leaders are 
at work; new experimentation is going on. In- 
dustry in some of its branches is finding its soul 
— as I shall show in coming chapters. 







Welfaee Work as a Solution of the Pkob- 
LEM AND How it is Regakded by Both 

Employers and Workers 


IF one would bore into the very kernel of the 
present industrial unrest, let him examine 
the significant modern development of wel- 
fare work in American mills and factories. For 
here, at once, we encounter an extraordinary 
difference of view between certain leaders among 
the employers and certain leaders among the 
workers. In the Senate investigation of the 
steel strike, for example. Judge Gary gave no 
part of his testimony greater importance, nor 
spoke with more sincere enthusiasm, of any 
aspect of the work of the United States Steel 
Corporation, than of the extensive welfare 
work now in operation in the various mills and 
towns— pensions, stock-ownership, sanitation, ac- 
cident preventions, schools, churches, clubs, play- 
grounds and the hke. He gave at length the 
numbers of restaurants, swimming-pools, athletic 
fields, bandstands, sanitary drinking fountains, 
water-closet bowls, clothes lockers, and so on, 
provided by the corporation for the benefit of 




its army of 268,000 workers. He showed that 
in 1918 over $17,000,000 was expended for these 
purposes, and in 1917 over $10,000,000. 

He said: " The amount we have expended for 
the benefit of our employees is extraordinary as 
compared with anything that has ever been done 
before, so far as I know, anywhere or during 
any period." 

This is absolutely the truth; no individual or 
corporation ever equalled Judge Gary's great 
company in the extent or cost of its welfare 
work. There is, therefore, no better example 
of the system to study; nowhere is the demon- 
stration more complete. 

Nor is there any doubt that Judge Gary looks 
upon the system with sincere faith and satisfac- 
tion, for he said to a meeting of the presidents 
of his subsidiary corporations (in January, 

"All of us experience more or less a thrill 
of pride in hearing from government ofiicials 
that our reputation for considering and promot- 
ing the welfare of our employees is the best in 
the entire industry." 
He is right — it really is. 
How, then, are we to interpret the bitter and 
cynical references to this work by many labour 
leaders; how explain — if it can be explained — 
Mr. Gompers' contemptuous term for it? He 


called it — before the Senate Committee — " hell- 
fare " work. If this is the word of the most con- 
servative labour leader in America, it can be 
imagined what must be the feeling of more 
radical leaders. 

Are not all these things— these comforts, these 
aids to health and pleasure, these incentives to 
thrift — are they not all good? Why, then, 
should they be s'o bitterly refuted by the labour 

Before trying to explain this extraordinary 
difference of view, I wish to present a few more 
facts about the work Judge Gary has done: 
for it is in many ways ver; wonderful. 

The phrase, " Safety First," which has now 
spread over the world, originated under Mr. 
Buffington in one of the plants of the Illinois 
steel Company at Chicago. It represented the 
beginning of a powerful effort, in which the 
Steel Corporation has led the entire country, 
to introduce safety devices, to eliminate acci- 
dents. No industry is more dangerous to life 
and limb than the steel industry and in none has 
the " Safety First " movement made greater 
progress. Competitions have been set up be- 
tween mill and mill and department and dc 
partment and at Gary I saw huge, electric- 
lighted bulletin boards like baseball scores — 
bearing the records of various groups of workers 





in preventing accidents: and everywhere about 
were signs of warning. 

"Danger Here." 
Our Motto: Safety and Cleanliness." 

" No Smoking, Matches or Open Lights." 

They have accident specialists — ^veritable 
safety " cranks " — who do nothing else but study 
safety improvements and train the men to watch 
for danger. Last year (1918) they spent over 
$1,000,000 in this work of accident prevention. 
Between 1906 and 1912 the number of serious 
and fatal accidents in all the plants of the 
corporation were reduced by forty-three per 
cent. They also have a fund for relieving men 
and families of men injured or killed m the 
mills, upon which they expended in 1918 

They have a pension fund started by Andrew 
Carnegie m 1901 for superannuated or disabled 
workers. Over 2,900 men are now so pensioned, 
receiving an average of about $22 a month. 
This cost in 1918, $709,000. 

But the feature of the entire plan upon which 
Jud ge G ary lays most^ St^^^s is the effort to 
encourage stock-ownership in the corporation 
among the workers. Arrangements are made to 
sell shares at a little below market price to all 
classes of employees, give them a long time to 


make payments, and finally, if they hold their 
stock continuously for five years to pay them a 
bonus of $5 a share per year for each share 
they hold. On September 1, 1919, there were 
61,328 employees out of a total of 268,000 who 
owned 158,061 shares in the corporation upon 
this basis. This is, of course, a very small frac- 
tion of the total stock-issue of the great corpora- 
tion — about one fifty-fourth — not enough, nat- 
urally, to influence the action of the directors 
in any way. It represents an average saving of 
aU employees of about $60 each — if the value of 
the stock is counted at par. 

The corporation has also built many houses 
for its employees (though far from enough) 
which it rents at rates generally lower than those 
prevaUing among private owners, or has sold the 
homes, as at Gary, on long time at low pay- 
ments. It also contributes liberally to all 
churches, many schools, libraries and the like. 
Judge Gary personally presented a large sum 
of money for erecting the Y. M. C. A. building 
in the city of Gary: and Andrew Carnegie built 
the fine library. 

Why should the workers call this " hell-fare '* 
work? If we are reaUy to understand the 
length and breadth and depth of this problem 
we must understand exactly how these things 
look and feel from below. As I have said 




before, it is not what the employer thinks the 
worker ought to feel that matters, but what the 
worker really does feel. 

I have talked with many leaders and many 
workers upon this subject and endeavoured to 
get at their exact point of view. M. F. Tighe, 
President of the Amalgamated Association of 
Iron, Steel and Tin Workers of America, one 
of the leaders concerned in the recent steel strike, 
set forth some of the objections to welfare work 
in his testimony before the Senate Committee. 

" The paternal features of the industry," he 
said, " that have been so very fluently expounded 
by the corporate interests, are nothing more or 
less than a hog-chain shackling the employees, 
putting them in the position that they dare not, 
at any time, assert those inalienable rights the 
American citizen is supposed to have — because, 
once he becomes the owner of that property, he 
must be employed in that plant, he must be sub- 
missive to any conditions that management may 
undertake to put upon him — for if he loses his 
position what value is placed upon his prop- 
erty? " 

As to the bonus system, Mr. Tighe also says: 

"We are opposed to that. We beUeve a 
man should be paid for the actual labour he does 
and that pay should be put in his envelope on 
every pay-day and not be left to the discretion 


of a so-caUed philanthropic employer at the end 
of a certain period." 

The Chairman: Your position is that you do 
not ask for gifts? 

Mr. Tighe: Yes: that is our position exactly. 

The Chairman: You ask for justice not gifts? 

Mr. Tighe: Yes. 

I got the point of view of one of the workers 
at Gary regarding the stock-ownership plan. 
He himself held two shares of the stock. 

" Every share of stock," he said, " has a string 
attached to it. In order to win the bonus we 
must stay five years in the employ of the com- 
pany: and even then the bonus is distributed 
under the rules only to those who in the judg- 
ment of the management ' have shown a proper 
interest ' in the welfare of the company. If he 
leaves the employ of the company for any reason 
— say he strikes — ^he loses the entire bonus. You 
see what cowards that tends to make of men who 
have a small stake in the company— and what 
power it puts in the hands of the company. It 
tends to make men afraid to organize or protest 
a&rainst abuses, lest they be accused of not being 
4al. In the same way a pension system which 
is regulated according to the recommendations 
of foremen and superintendents is a way of 
shackling many older employees. Then, a cer- 
tain number of men are tied up with houses 



they have bought from the company on long 
time: for they know that unless they are * loyal ' 
and * good ' they may lose their jobs and have to 
sacrifice their property— for in most mill towns, 
if a man is discharged, he must move elsewhere." 

Mr. Gompers said to the Senate Committee: 

" What the workers want is l ess charity and 
better wag es and labouring conditions, the 
direct purpose of this welfare work is to ahen- 
ate and prevent the workers from thinking in 
terms of organization for self-protection and 
mutual welfare." 

In its essence the criticism of the workers is 
that welfare work is an expression of benevo- 
lent autocracy, while they are struggling for 
more democracy: that it breaks up any unity of 
action: and while it makes life pleasanter for 
the few, it often consigns the great mass of 
workers to the necessity of living under hard 
working conditions. In the recent strike many 
of the skilled workers, the Americans, were thus 
tied up to the company by stock-ownership, the 
purchase of homes and the like, so that any 
group action or organization among the workers 
was robbed of its natural leadership. Of 268,- 
000 workers only 61,000 (and this includes many 
foremen, superintendents, and other officials) 
were stockholders. 

" What use is most of this welfare work," one 


workman asked me passionately, " when we are 
compelled to work twelve hours a day and seven 
days a week ? In the face of the twelve-hour day 
Carnegie Libraries, Y. M. C. A.'s, playgrounds, 
and the like are just jokes." 
Another workman put in: 
"Judge Gary says that welfare work pays, 
and pays big, in dollars and cents. If that is so, 
why should he take credit to himself for doing 
it? Of course it pays, because it helps keep the 
workers separated from one another, prevents 
organization, and enables the company to main- 
tain its long work day." 

Thus the very argument used by the em- 
ployers to prove the value of the welfare work, 
that it helped prevent labour organization and 
thus broke up the strike, is the very argument 
used against it by the workers. 

Another argument frequently heard among 
workers is this: 

"Give us a chance to organize and decent 
wages and we will do our own welfare work and 
do it on a real democratic basis." 

Some of the activities of labour unionism 
along these lines in America are most interest- 
ing. Several strong unions in Chicago and New 
York, for example, have their own educational 
directors with classes, lecture and concert 
courses, and the like. Some of the concerts 



given by the clothing-workers — and given in 
union-owned halls — are of the very best. Other 
unions have extensive benefit and insurance sys- 
tems. In his testimony before the Senate Com- 
mittee, for example, Mr. Gompers compared the 
pension system of the United States Steel Cor- 
poration with that of the International Typo- 
graphical Union showing that the latter was 
maintaining just twice as many pensioners, in 
proportion to its membership, as the United 
States Steel Corporation: and that these pen- 
sions were not regulated from above, but were 
awarded by the men themselves. 

It was a significant thing, at Gary, to find 
that no work was spoken of by both company 
ofiicials and workmen with more sympathy and 
approval than the Good-Fellow Clubs and the 
Joint Committees for carrying on the accident 
prevention work. Here, through a tiny crack, 
had crept in a little democratic relationship, a 
little co-operative effort, between management 
and men. The Good-Fellow Clubs are instru- 
ments for aiding needy workers and the Joint 
Committees in the accident work are for the 
pm-pose of building up public opinion among 
workmen in the mills in the matter of preventing 
accidents. In both of these limited activities 
committees of the management and committees 
of the workers are really acting toegther— and 


both are proud of it— and proud of the results 
of it. For everything depends upon the spirit 
of approach. 

" If this method works so well in these small 
matters," I asked one of the great steel men, 
" why wUl it not work just as well in dealing 
with other and larger questions— wages, hours, 
living conditions?" 

"Why not?" he asked, "but we're terribly 
slow to see it." 

Yet this is exactly what Rockefeller saw— and 
introduced— in his Colorado steel plants. It is 
what the Midvale Steel Company has seen and 
introduced in several of its great plants. Many 
hundreds of manufacturing establishments in 
America are already adopting this new demo- 
cratic relationship in the management of the 
labour aspects of their work. These really re- 
markable experiments— all so new that they 
were practically unknown before the war— I 
shall explain in following chapters. 

?JIS.!?aS5^ °^ ^Poc'hs in the relationships of 
labour and capital— since large-scale industry 
came into existence— are clearly distinguishable 
111 America. 

1. The purely autocratic, individualistic 
method. The employer believes that he can " do 
what he likes with his own property." He 
" hires and fires " to suit himself. Sometimes 



when the plant is small and the owner-manager 
is close to his men and can preserve a close hu- 
man relationship, or when it is larger and he 
happens to be a great personality, this method 
may work very well — at least from the point of 
view of the employer. But when ownership be- 
comes separated from management, as is so 
often the case now in America, or the plant 
grows so large as to destroy the possibility of 
close personal relationships between manage- 
ment and men, it often works very badly indeed. 
It is this destruction of real contact and real 
understanding between employer and worker 
that is the cause to-day of much of the prevail- 
ing unrest. Especially is this true if the man- 
ager is of the dominant, driving type. " Catch 
'em young, treat 'em rough, tell 'em nothing," 
was the motto of one steel-miU manager in the 
recent strike — and some employers thought it 
really worked, because he succeeded in keeping 
his mill in operation while others closed down. 

2. The autocratic niethod tempered by wel- 
fare work: as in the United States Steel 
Corporation. Judge Gary is an absolute auto- 
crat, but he is a benevolent autocrat. 

3. The militaristic method, in which labour is 
organized, and often the employers as well. 
Employers and employees are in two more or 
less hostile canips: they have frequent wars 


(strikes) and sign frequent truces (collective 
bargains). War is always wasteful and mili- 
tary methods inefficient, and always the non- 
combatant (the public) is the chief sufferer. 
Yet this is the method (and labour has had in 
the past no other way of protecting itself or 
winning its rights) under which a large propor- 
tion of the industries of America are now con- 
ducted. Sometimes a little real co-operation 
is attained by this method: usually not. 

4. The new co-operative method now begin- 
liag to have a wide trial in America— and a 
still wider one in Great Britain. Here shop 
committees of workmen (whether organized in 
trade unions or not) and the management seek 
to co-operate, rather than to fight, over their 
mutual problems. 

5. A step beyond this we have at least one 
great experiment— in the manufacture of men's 
clothing— in establishing a government for one 
entire industry in America: a government based 
upon co-operation and a democratic relationship 
between management and men throughout the 

These new schemes are not the mere sugges- 
tions of theorists or dreamers, but are being 
practically worked out by practical men, both 
employers and employees, as I shall show in 
following chapters. 


The New Shop-Council System as Applied 

IN A Typical Small Industry — The 

Dutchess Bleachery at Wap- 

piNGERs Falls, New York 

I CAN best set forth the new method of co- 
operation between employers and workers 
in America — generally called the " shop- 
committee" system — by telling the extraordi- 
narily interesting story of what has happened 
in one small industry where it has been applied. 
Before the war this new method was prac- 
ticaUy unknown either in America or elsewhere 
— although there were several pioneer experi- 
ments in progress — but to-day there are several 
hundred industries — or if individual plants are 
counted, many thousands — varying all the way 
from huge steel plants like the Colorado Fuel 
and Iron Company and the Midvale Steel Com- 
pany, to little factories of a few hundred hands, 
where the new plan is being practically tried out. 
In a following chapter I shall present a general 
survey of the present state and promise of the 
entire movement — for the experiments vary 
widely in detail and still more widely in spirit — 



but the actual living operation of the new 
method can best be understood by looking at its 
application to a small industry in a small town 
where all the factors are plainly visible. 

Wappingers Falls is a very old town, as towns 
go in America. It lies back from the Hudson 
River a few miles below Poughkeepsie, where 
a fine stream comes down out of the hills to 
supply power for its mill. In earlier days before 
the railroads came, its only communication with 
New York was by way of Hudson River sloops 
which in summer worked in through the narrow 
inlet, or in winter by the stage-coach along the 
river road. 

Here long ago a bleachery and cotton print- 
works was established (now called the Dutchess 
Bleachery). I asked a bent old man I saw 
working over one of the vats how long he had 
been there. 

"What's that?" 

" How long have you worked here? " 

"Fifty-nine years," he said, "in this one 

So it was long ago. It was like many, if not 
most such plants in America. It had its Royal 
Family that owned everything— mill, houses, 
land — and lived little there, but had leisure for 
education, and European travel— opportunity 
written large. And the people worked long 




hours — as long, they say, as fourteen — then 
twelve, then ten, and wages were low. There 
was never any incentive upon their part to work 
hard, or improve methods, or increase produc- 
tion, because no surplus of their common toil 
ever by any chance reached their pockets, for 
their income was inexorably set by the iron law 
of supply and demand in the wage-market. On 
the other hand they did help bear whatever 
losses the state of the trade or the inefficiency 
of the management might entail upon the in- 
dustry — for whenever business was " dull " the 
mill could be slackened down or closed, and they 
thrown out of employment. Their labour was 
as much a commodity as the chlorate of lime 
they used in bleaching the new grey cloth or the 
starch in stiflFening it. 

A few years ago the miU was purchased by a 
new company, the chief owners of which were 
men with social imagination. They were among 
the many employers in America who are be- 
ginning to be troubled about their relationships 
to their business and to their workers. 

When the war came to Wappingers Falls 
there was that sudden lift of common effort, 
common enthusiasm, which for a moment fired 
the soul of America. For a moment we forgot 
ourselves; we were greater than ourselves. 
There are those who mourn over the reaction. 






and the present wave of unrest, but nothing can 
ever rob us of that great moment, nor wipe out 
the effect of it. We shall never go back to the 
ante-bellum ways or times. Whether we like 
it or not we are entering a new world. 

The war jogged Wappingers Falls, as it 
jogged so many other towns, into a sudden self- 
consciousness. It had, for once, a good look at 
itself. Here it was, a rather outwardly attrac- 
tive town of some 3,500 people — ^with com- 
fortable shady streets and picturesque hills all 
about. Most of the people lived in pleasant but 
more or less dilapidated houses, a few of which 
were miserably built of sheet-iron, roofs and all, 
as cold in winter as they were hot in summer. 
There was one big Roman Catholic Church — 
for a majority of the people are of Irish and 
Italian origin— and four struggling, competing 
Protestant churches most of them without vision 
or leadership. Its schools were no better, nor 
worse, perhaps, than those in other mill towns 
like this — ^more a habit, a routine, than a source 
of power. Its politics was without issues or 
ideas: had degenerated into local factional strife 
for trivial authority and small rewards. Its 
saloons were the saloons of any small manu- 
facturing town, and the less said of them the 
better. As for the mill in which all the people 
worked, for which the town existed, it was owned 



almost exclusively (its capital is $1,350,000) 
by people who did not live in Wappingers Falls 
and never had. 

Not an especially pleasant portrait, you say: 
and yet this town was probably better than the 
average of mill towns in America. It might be 
called A Portrait of an American Town at the 
Beginning of the Twentieth Century. There 
was not enough emotion below the surface to 
make its aspect tragic — ^there was only blank- 
ness, dulness, uncreativeness — ^boredom! 

In the summer of 1917 a young minister 
named James Myers went to Wappingers Falls. 
He was sent by the owners of the company 
to see what he could do to change the conditions. 
When the new company had taken the property 
it had been much run down physically; they had 
built it up, got it on a profitable basis, and 
they wanted now to attack the problem of a 
new relationship with the personnel. 

JMXx Hatch, the treasurer of the company, had 
been for some time interested in experiments in 
"industrial democracy," and had begun the 
introduction of the new system in a mill in which 
he was interested in Abbeville, S. C. He 
wanted to try out something of the same sort 
in Wappingers Falls. He had only two general 
ideas regarding the method of going about it — 
both fundamental ; one was to go slow, not make 



changes too abruptly, the other was to be honest 
with the workers at every step: that is, not to 
give them something that looked like a "new 
deal," merely as a screen for a closer riveting 
upon them of the old system — or to prevent 
unionism. , 

A meeting of the 500 operatives was called 
and the new representative plan was explained 
to them and they elected by secret ballot six 
representatives (afterwards eleven) from the 
various departments. These were organized 
into a Board of Operatives and James Myers 
was chosen executive secretary, his salary being 
paid by the company. It is to his enthusiasm, 
vision, and organizing abiUty that the plan owes 
much of its success. 

There was one small labour union of skilled 
men in the mill and they joined in the enterprise 
and elected their president, Mr. Bennett, to the 
Board where his experience as a union leader 
was of great value. The Board, at the beginning, 
was given three groups of powers: 

1. To solve the problem of housing. The 
company houses were out of repair and there 
was constant complaint. The company agreed 
to give the Board of Operatives entire charge 
of these houses and to supply the money for aU 
repairs they should recom'mJnd. 

2. To take up the matter of education and 



recreation in the community and especially the 
matter of a club-house to take the place of the 
saloons when they should be closed. 

3. The Board was also empowered to suggest 
methods of improvement to the management in 
other matters — ^living conditions, wages and the 
like, but it was without power to enforce its 

A survey of housing conditions was immedi- 
ately begun: and the practical knowledge of the 
operatives on the Board was at on^ce apparent 
— and also their desire to maintain a businesslike 
attitude toward the problem. That is, they held 
that the houses ought to return a fair interest 
on the capital invested. At once a great trans- 
formation began to take place in the village: 
reconstruction of old houses, new paint, new 
conveniences: and even the removal of several 
antiquated tenements. All this was entirely 
managed by the Board of Operatives but paid 
for by the company. The Board also estabhshed 
a fine baseball and athletic field in a natural 
amphitheatre, and a playground for the children, 
and by wmter they had taken possession of one 
of the old saloon buildings and changed it into 
a well-equipped village club-house which is, to- 
day, one of the most popular places in town — 
a centre of its life. They also began the pubhca- 
tion of a monthly paper called Bleachery Life 

I i 


— dealing not only with the new plans but with 
all sides of mill life, including certain news 
printed in Italian for Italian workers. This has 
been a real agency in awakening mutual inter- 
est. Plans have now been made for selling all 
company houses to workers at low prices with 
deferred payments: and a savings system has 
been instituted. 

The officials of the company kept in close con- 
tact with these developments. In November, 
1918, they were ready to lay the foundations for 
the next step. Mr. Hatch addressed a mass- 
meeting of the workers and outlined the broader 
aspects of his new plan which he called a part- 
nership between workers, management, and 

In a partnership each partner, he explained, 
shares the responsibility of management by tak- 
inff charge of the business he is best qualified to 
h^dle: Jartners are also entitled to know the 
general results of their joint efforts and he said 
that in future the Board of Operatives would 
receive the report of the net earnings of the 
company just as did the Board of Directors; 
and, finally, partners share in the final net 
profits of the company, and he outlined a new 
plan of profit-sharing between the owners and 
the workers which I shall describe later. 

Finally he summed up his attitude toward the 



whole problem in words which merit careful 
reading as a fine expression of the new point of 

Why am I not satisfied with the system of paying wages 
as determined by supply and demand, i.e., with paying the 
market price for labour and making as large profits for the 
company as market conditions will permit? Because I am 
convinced that this system has been weighed in the scales 
of human experience and found wanting. It treats every 
employee as a means to an end, the end being the enrich- 
ment of the employer, whereas every man, every woman, 
and every child is an end in himself or herself, the most 
valuable creations in the universe. To phrase it differently: 
Because this system has on the one hand resulted in poverty 
for many in this glorious land of plenty, and on the other 
causing, as it does, the concentration of great wealth in the 
hands of a few, has enshrined the pursuit of material 
wealth as the dominant life motive of men. 

This was a general outline of principles: as 
yet there was no real machinery for working 
them out. But such machinery cannot be 
created out of hand : it has to develop out of the 
needs of the situation. As the Board of Opera- 
tives broadened its scope of activity it came 
again and again into contact with the deeper 
problems of the mill itself: wages, hours and 
real co-operative control. As yet it could only, 
make suggestions to the management: but by 
May, 1919, it was ready to ask for more power. 
The Board explained to the company that " the 



apathy and lack of interest with which the em- 
ployees view the Board of Operatives " were due 
to the fact that its powers did not affect directly 
those "things in which many employees are 
most vitally interested— matters within the mill, 
question of hours, wages and the various condi- 
tions by which they are surrounded in their 
daily work." In response to suggestions from 
the management, which was already considering 
the reduction of the hours of labour in the 
plant, they also asked for a forty-eight-hour 
week instead of the prevaihng fifty-five-hour 
week and for an increase of wages by fifteen 
per cent. At the same time the Board of 
Operatives now felt enough of the new spirit of 
co-operation and partnership not to stop merely 
with a demand for better wages and shorter 
hours for the workers, but they offered to do 
their part in keeping up production. They ex- 
pressed their determination to produce as much 
in eight hours as formerly in ten, and actually 
suggested the installation of time-clocks to keep 
a record of all employees. Their resolutions are 
well worth considerinff: 

While feeling its responsibility in making these sugges- 
tions (about decreasing hours and increasing wages), the 
Board of Operatives believes that in addition to the saving 
which will be affected in power and light, the plant can 
be so managed, and its efficiency so improved in other ways. 



as to result in turning out practically the same production 
in 48 hours as it turns out at present in 55 hours. To 
this end the Board of Operatives wishes specifically to 
recommend the following methods of increasing efficiency: 

That time-clocks be installed, covering all operatives. 

That a regular monthly foremen's conference be held for 
mutual discussion with the agent, of the problems of mill 
management, in order to harmonize the working of the 
various departments of the plant with each other; to im- 
prove working conditions which may effect plant efficiency; 
to promote the spirit of co-operation among all departments, 
and with the management, and to increase the efficiency and 
production of the entire plant. 

That a mass meeting of all employees be called and full 
explanations made in regard to the importance of co-opera- 
tion on the part of every one in order that production may 
be kept up and no loss sustained by us all as partners, 
on account of reduction of hours. /\^ 

The next step was a long one. The company 
decided to establish a Board of Management, 
consisting of three members representing the 
employer's side (the Manager of the mill, the 
New York agent, and the Treasurer of the com- 
pany — Mr. Hatch) and three members chosen 
by the Board of Operatives, Mr. Aurswald, 
Mr. Beasley and Mr. Clark. This Board was 
given absolute power " to settle and adjust such 
matters of mill management as may arise" — 
practically complete control of the mill. In 
case of a deadlock between the two groups over 
any question, they are empowered to elect a 

1 i 
1 i' 



seventh arbitrating member whose deciding vote 
shall be final. This Board went into control 
in August, 1919. 

A profit-sharing system was adopted on these 
terms: After all expenses are paid, including 
SIX per cent interest on capital, the net profits, 
whatever they may be, are divided,^ half and 
half, between the stocjkholders and the workers. 
Mr. Hess, the Agent (Manager) of the mill 
has introduced a very complete cost-accounting 
system, so that net profits can be known monthly 
and dividends are therefore now declared 
monthly. The first dividend to the wage- 
workers was paid last August and represented 
four per cent upon wages earned in the previous 
six months. 

No sooner, however, is any profit-sharing plan 
discussed than the problem arises as to what 
will happen when losses come. The company 
has met this problem by establishing two sink- 
mg funds to be built up out of profits until 
each reaches $250,000: one to pay half wages 
to workers if the mill is forced to close down, 
' the other to maintain regular interest on capital! 

These new responsibilities, coupled with the 
new opportunities for a real share in any in- 
creased effort has awakened a wholly new spirit 
in the mill. There is a reason now for " getting 
busy," for pushing up production. Instead of 



opposing the introduction of efficiency schemes 
in the plant — as workmen so often do — ^they 
welcome them. For more production, more 
eflScient work, means more profits — and half of 
all profits go to them. 

I want to give one example of this. Last 
winter the New York ofiice " came back " at the 
Board of Operatives at the mill because of 
damage to one large shipment of cloth through 
"pin-cuts." It had cost the company $6,000. 
In former times this loss would have been 
"swallowed" and not much said: perhaps some 
employee "fired" if the guilty one could be 
found. Here is the way the New York oflice 
expresses its feelings to the operatives at the 

Let's just for the fun of the thing figure this out for 
each of us. Increased expenses mean decreased profits, 
and in this instance our decrease in profits amounts to 
about $6,000, less what we can get for the salvage. Under 
our partnership agreement the stockholders stand half, or 
$3,000, and the other $3,000 is at the expense of the opera- 
tives. You all can easily figure out for yourselves just 
about what your individual share of this is, and can ask 
yourselves if you got your money's worth. We are sure 
the stockholders did not. We haven't written you a letter 
for some time, but this subject sure did drag us out of 
our shell. 

It was no trouble for the 500 operatives at 
the mill to calculate what that piece of careless- 




iiess cost, on an average, each of them. It was 
$6. It went through the mill like a shock and it 
was known just how and where the damage 
occurred. It can be seen what the public opinion 
of the mill would be toward those workers who 
had been so careless as to reduce by $0 the 
profits of every employee in the miU. 

Another thing the Board of Operatives has 
done is to offer prizes for suggestions from 
workers—in order to get the minds of every one 
to working upon the common problems of the 
shop. This has already resulted in a number of 
improvements. At the payment of each month's 
dividend also, Mr. Hess proposes to hold a mass- 
meeting and go over aU the affairs of the mill 
and show the workers where they can improve 
processes, cut corners, save money. With both 
managers and men working at improvement of 
methods, something is bound to happen at Wap- 
pingers Falls! 

But this is not all. The company has now 
gone still a step further upon the road to " in- 
dustrial democracy." It has reorganized its own 
Board of Directors. It has now five members, 
three representing capital and management, one 
elected by the Board of Operatives, and one 
representing the community of Wappingers 
Falls— who is the President of the town. This 
is aimed to draw together all the interests con- 



cerned : the management, the workers, the town. 
Especially is the last a novel idea — community 
representation — for in all old mill towns there 
is a heavy weight of dull local suspicion of the 
mill and the company. If the town can kiww 
what is going on, it is the theory of Mr. Hatch 
that the town also will help. He wants good 
will all the way round. The company has now 
also made arrangements to sell shares of its stock 
to its operatives at a price somewhat below 
market value. 

The greatest source of difficulty, suspicion 
and jealousy, leading to war in international 
affairs is secret diplomacy. And so it is in in- 
dustrial affairs: secret deals, back-stairs agree- 
ments, sly bookkeeping, dishonest profit-sharing. 
The men behind the Wappinger Falls experi- 
ment recognize this and have provided for a 
wide degree of publicity. With representatives 
of the Board of Operatives sitting on the Board 
of Management of the mill nothing relating to 
the manufacturing end of the business can be 
covered up — and now with a delegate of the 
Operatives and of the town in the Board of 
Directors the entire inside of the company's 
business will be known. This is a very advanced 
step— taken, so far as I know, by only two other 
employers: one the Filene Store in Boston, the 
other the Procter & Gamble Soap Company of 


Cincinnati. It is perhaps practicable yet only in 
relatively small industries, but it is a tremen- 
dous demonstration of the absolute sincerity of 
the employer in approaching his problem. It 
^ also the best insurance to the employer that 
his mdustry will weather hard times and the 
possible necessity of reducing wages with the 
full co-operation of the workers— for they, also, 
will be on the inside and know of the difficulties 
and problems that confront the industry as weU 
as he does. 

This, in brief, is the new plan as applied at 
Wappmgers Falls. It is, of course, very new— 
as are all of these experiments. As Mr. Hatch 
himself says: 

"We cannot really know how it will work 
until it has been under way for three or four 
years and we have passed through a period of 
hard times and losses. That will be the test of 
it! ' 

The great point, however, is that here the 
sptrtt of approach is honest on both sides: there 
are the beginnings of real co-operation, of real 
democratic control. With such a spirit new 
adjustments can be made to meet new difficul- 
ties. Like any other human scheme it can be 
attacked and criticized at many points, but the 
great thing here is that the problem is beinff 
approached with a genuine scientific desire to 



know the conditions and a spirit of goodwill 
in meeting them. If this does not work nothing 
else will — and we might as well toss over civiliza- 
tion, retire to the cynic's corner, and rail at the 
wickedness of men! 

I should also like to add just this observation: 
and it applies as well to most of these new ex- 
periments, where they are genuine, and that is 
that both sides seem to be " having the time of 
their lives " — downright enjoyment of the new 
adventure. For it is real creative work in a 
new field — the most fascinating kind of creative 
work: with human beings. As one employer in 
another industry said to me: 

" It's the most interesting thing I ever did in 
my life. It beats mere money making all 
hollowl " 

Like any other truly creative work its results 
exceed expectations, and yield unanticipated 


Development of the Shop Counch. System 
IN America— Method of Organi- 
zation — The Movement in 
England and Gekmany 

HERE is a significant observation 
quoted, not from a labour leader, nor 
yet from a radical reformer, but from 
an American steel master, who is also a great 
employer of labour: 

" The real leader in industry to-day is not the 
man who substitutes his own will and his own 
brain for the will and intelligence of the crowd, 
but the one who releases the energies within 
the crowd so that the will of the crowd can be 

Charles M. §chwab has also said: 

" I know something about making steel but I 
don't know anywhere near as much as the 
thousands of steel workers." 

His view corresponds closely with that of the 
foremost thinkers upon industrial reconstruc- 
tion both here and in Europe; and that is, that 
there are vast undeveloped resources of knowl- 
edge, energy and creative genius in the human 




factor in industry ; and that the next great step 
forward in civilization will consist in releasing 
this knowledge, energy, genius of the great 
masses of the workers. 

Under the old autocratic regime in industry 
there have been specialists in financing, in sell- 
ing, in advertising, in technical processes; but 
the last thing of all to be considered was the 
most important of all, tlie human element; the 
labour; in industry. Any foreman or boss could 
"hire and fire." It is only very recently that 
labour-experts, labour-managers, labour-engi- 
neers have begun to appear as an essential factor 
in industrial organization, and in only a few of 
the more enlightened has the labour expert risen 
to anything like an equality of status with the 
other departmental chiefs. I know of only a few 
cases in which labour management is dignified by 
a vice-presidency or other high official recogni- 
tion in the company. 

Under the old autocratic regime everything is 
directed from above, according to the will of the 
employer or manager, and the tendency is toward 
the suppression of every form of creative energy 
on the part of labour. The United States Steel 
Corporation is to-day the greatest American 
example of this system. Fortunately, not only 
in the steel industry but in many others as well 
the new secret for releasing the enormous ener- 



gies of human beings is now being discovered 
and developed. The idea is spreading with 
extraordinary rapidity both in America and in 
Europe. It is not confined to the thoughtful 
labour leaders, nor to students or experts in in- 
dustrial management, but many employers and 
employers' associations are, as one observer said 
to me, " riddled with it." 

And this " secret " consists in applying to in- 
dustry little by little the simple machinery of 

" We do not need a revolution," said H. L. 
Gantt, one of the true pioneers of the movement, 
" we do not need a class war. Most people will 
work for the common good if you give them a 
chance. The trouble is that we have been cling- 
ing to an autocratic system under the mistaken 
idea that it was good, at least for the aristocrat. 
The fact is, that it isn't. Democracy is far 
better for all of us. Industrial democracy will 
release our energies and make us the strongest 
people on earth." 

I described in the previous chapter how this 
new system had been introduced and showed how 
it worked in a typical small industry. To-day 
there are hundreds even thousands of mills, fac- 
tories and other business organizations, all the 
way from huge steel plants, like the Colorado 
Fuel & Iron Company, the Midvale Steel 



Company, and important transportation and 
shipbuilding companies, to little factories with a 
few hundred hands where the new idea is being 
tried out. It is a very new m ovement. Before 
the war it was practically unknown outside of 
a few halting pioneer experiments; to-day it is 
scarcely an exaggeration to say that it is more 
in the thought of American industrial leadership 
than any other single group of ideas. 

Mr. Gantt predicted that it would make us 
" the strongest people on earth "—but we shall 
have to push hard indeed if we beat the British 
and the Germans in the introduction of this 
great new organization of human energy in in- 
dustry. For the British have already gone be- 
yond us through the adoption as a national 
pohcy of the Whitley Councils System provid- 
ing for the reconstruction of industry upon a 
democratic basis. While a large proportion of 
our employers and labour leaders, through lack 
of understanding, are still opposing the whole 
idea, the gi'eat majority of both organized capi- 
tal and organized labour in Great Britain have 
accepted it. Already forty-one national indus- 
tries, including many hundreds of individual 
plants, employing over two and one-half million 
workers, are operating under the new system — • 
although none of the great basic industries have 
yet adopted it. 

'■'■■I. i . 

It !' 


The Germans have sought the same end in 
their methodical and formal way by passing, on 
January 17th of this year (1920) a "shops 
council " law which will apply to all factories or 
pknts where " more than five men or women 
are employed." It is called " one of the most 
radical pieces of economic legislation since the 
war." It means the gradual reconstruction of 
German industry upon a co-operative and demo- 
cratic basis. 

Compared with the sweeping changes contem- 
plated in both Great Britain and Germany — 
our economic competitors-the American move- 
ment is stiU tentative and experimental. Al- 
though many enterprises are trying out the sys- 
tem, this represents a very small proportion of 
the tens of thousands of employing establish- 
ments in America. It is as yet a mere crack in 
the surface of the old order. 

The new method was adopted whole-heartedly 
during the war by our own War Labour Board, 
and through that organization applied in more or 
less rudimentary forms to many industries 
where labour disturbances were threatened- 
great concerns like the General Electric Com- 
pany, at its Pittsfield and Lynn plants, the 
Bethlehem Steel Corporation, the American 
Cash Register Company, and several important 
plants at Bridgeport, Conn. And the Presi- 



dent's Industrial Commission which recently sat 
at Washington has recommended the adoption 
of the new system as one of the main features 
of its report. There is this to be said about 
Americans; they are quick learners, and once 
they understand the enormous possibilities of the 
new co-operative relationship there is no doubt 
that it will be swiftly applied. The atmosphere 
of American life is peculiarly favourable to the 
growth of such democratic movements, and we 
have already demonstrated, during the war, an 
extraordinary ability to " get together " and to 
infuse industry with a " spirit of co-operation '* 
which accomplished great results in a short time. 

DeTocqueville long ago called attention to the 
peculiar genius of Americans for forming asso- 
ciations of all kinds, for all purposes — in short, 
their ability to work together. 

" Wherever at the head of some new under- 
taking you see the government in France, or 
a man of rank in England, in the United States 
you will be sure to find an association. The 
English often perform great things singly, 
whereas the Americans form associations for 
the smallest undertakings." 

The American approach to the new system is 
by the American method, through encourage- 
ment by volunteer associations and experimenta- 
tion in actual enterprises. It lacks the regu- 

- f/- 



larity of a German system prescribed by law, 
or a British system carefully studied by a gov- 
ernmental body and adopted from above, but 
what it loses in uniformity it may gain through 
variety of creative experimentation, the attempt 
by many individual brains to apply the principle 
to specific cases. This cannot fail to product a 
greater degree of flexibility and a closer adapta- 
tion to actual needs than any prepared plan. 
The creative impulse thrives best where experi- 
mentation is freest. 

So it is that when we endeavour in America 
to define what the new system of " industrial 
democracy " really is, we ^d a large number of 
different " plans " or " systems," varying widely 
in detail or still more widely in spirit We have 
the Colorado Fuel and Iron pkn. the Bridge- 
port plan, the Leitch plan, the Amalgamated 
Garment Workers plan, and others, and as yet 
no comprehensive governmental plan at all. It 
is a movement which has grown more or less 
spontaneously from within. 

Now, I shall not enter here into a discussion 
of the details of these various plans. I have 
illustrated in a former article exactly how the 
system was apphed in one small industry, but 
there are certain broad general principles which 
underlie the entire movement. Fundamentally, 
the effort is to do away with the old autocratic 



and militaristic organization of industry, and 
gradually substitute for it a new co-operative 
and democratic organization. 

Under the new system labour is no longer 
regarded as a mere part of the machinery, but 
as a partner with a definite share in the manage- 
ment. The essential structure is very simple. It 
consists of committees secretly elected bv the 
workmen of a shop or an industry (hence the 
names " shop committee " or " employees' repre- 
sentatives ") to meet similar committees ap- 
pointed by the management, thus producing a 
" workers' council " or " trade board " to discuss 
and settle certain of the problems of manage- 
ment — beginning with the problems especially 
affecting labour, working conditions, wages, 
hours and the like. One vital purpose of the 
movement is to reach and deal with the causes 
of unrest and never permit disagreements to 
develop to the point of open war (strikes). It 
may be a very crude and partial arrangement 
in which only a little democracy is let into the 
industry, and only very limiteji . powers con- 
ferred upon t he " council." or it may go to the 
length of admitting a representative of the 
workers to a place in the Board of Directors 
of the company with extensive privileges 
granted the workers of sharing in the profits 
and of purchasing stock in the corpora- 



tion— as in the example at Wappingers Falls 
which I have already described. AJ^,o{ the 
experiments represent an approach to " indus- 
trial democracy." Those who wish to go into 
the whole matter more fully — and there is a 
notable awakening of interest irrthis subject all 
over America — ^may find further information in 
certain books and reports: or better yet, by 
visiting some plant where the system is now in 
operation. The subject is as yet so very new, 
and the developments are so rapid, that the 
literature is rather unsatisfactory. Two new 
books which interpret the spirit of the move- 
ment are " Industrial Good-Will " by Profes- 
sor John II . Commons of Wisconsin University, 
one of the best of our American authorities, 
and "Industry and Humanity," by W. L. 
Mackenzie King, former Minister of Labour of 
Canada. For a more detailed account of actual 
^ plans in operation there is a report on " Shop 
Committees and Industrial Councils " pub- 
lished by the New Jersey State Chamber 
of Commerce, Newark, N. J., and a sum- 
mary, " Works Councils in the United 
States," by the National Industrial Con- 
ference Board, 15 Beacon Street, Boston. This 
latter is a report made under the direction of 
twenty-five of the foremost Employers' Asso- 
ciations of America. Other excellent reports 



may be obtained by applying to the United 
States Department of Labour: and there is a 
small book by W. L. Stoddard upon the experi- 
ence of the War Labour Board in establishing 
shop committees. 

Much opposition to the new sy stem in 
America is to be found among both employers 
and employees. Upon the side of the employers 
it is due in part to the natural inertia of men 
who have succeeded by the old method, who 
know that method well, and are fearful of any 
change or new adventure : in part to the human 
desire to maintain " authority " ; and in part to 
the short-sightedness that sees more immediate 
profit in the present system. It is so much 
easier to " boss " than to co-operate. And the 
new system looks like revolution! Many em- 
ployers will examine it seriously only after they 
have been through the hard punishment of 
strikes or other labour disturbances. It is 
among the younger, more progressive, more 
thoughtful employers that the movement is 
spreading most rapidly. Since the close of the 
recent steel strike, employers opposed to the 
plan have called attention to the fact that em- 
ployers working in companies having the new 
system (in a more or less rudimentary form) 
like the Colorado Fuel and Iron Company and 
the Midvale Steel Company — ^went out on strike 


II li 


with the other steel workers. This is true (ex- 
cept as to the Bethlehem Steel Company where 
the new plan of co-operation and conciliation 
was largely instrumental in keeping the plant 
going) but significantly it has not discouraged 
a single one of these great employers. They are 
gohig straight ahead with their forward-looking 
experiments. As the Iron Age well says in an 

We have looked upon the steps taken by various steel 
companies to cultivate better relations with their employees 
through conference committees^ on which the employee rep- 
resentatives are chosen by the workers, as having great 
promise, and we have the same opinion in spite of what 
happened at these plants in the period of the strike. 

It need hardly be said that the defeat of the steel strike 
leaders and the rising up of public opinion against them do 
not signify that there is no call for change in labor condi- 
tions in the steel industry. . . . 

The fact that so many workers in the production of steel 
are of foreign birth makes all the more necessary the em- 
ployment of extraordinary means by the employers to estab- 
lish a relation of confidence. The problem is neither more 
nor less than that of realizing throughout the industry the 
same democracy that was urged as the goal of every united 
effort of managers and men during the war. We believe 
the employee representation plan is the best means yet 
devised for reaching the desired end. 

On the part of the workers the opposition to 
the new idea is also due to fear and misunder- 


1 ty\y 

standing — especially among the older and more 
conservative leaders of the Gompers type. They 
havVbuilt up their labour organization upon a 
militaristic basis: they regard the employer 
more or less as a natural enemy upon whom, 
from time to time, they make war (strike) and 
with whom they sign truces (coUective bar- 
gains). It is as hard for them to get the new 
idea of frank co-operation and a democratic 
relationship as it is for the old-fashioned em- 
ployers. And they reaUy have a genuine basis 
for theh- apprehension: for in some cases the 
new device of shop-organizations, so-called 
« company unions," has been deliberately used 
by employers for hampering labour organization 
or weakening its influence. The workers know 
what an indispensable instnmient labour organi- 
zation has been to them in getting even the 
primary recognition of their rights and they 
dread desperately anything which suggests inter- 
ference with their free action in this regard. 
They are very suspicious of certain of the " com- 
pany unions" in the steel industry: indeed one 
of their demands when the steel strike was 
called was the "abolition of company unions." 
On the other hand some of the progressive 
younger leaders like Hillman of the Amalga- 
mated Garment Workers, believe thoroughly 
in the new movement on the ground that any 

I' I 

V h 


association of workers, giving them freedom 
to act in matters pertaining to their own lives, 
leads certainly to more self-conscious organiza- 
tion—and will tend to help rather than hinder 
the labour movement. 

The only secure approach to the new system 
is a genuine spir/o'f goodwill firmly based 
upon a scientific examination of all the factors 
in the problem. Any employer who " takes on " 
the *' shop committee " or " employees' repre- 
sentation " system merely as a sop to labour, or 
with the intention of using it to fight unionism, 
or to postpone doing real justice to the workers, 
is doomed to failure. He discredits the whole 
idea, in which the spirit of approach is the es- 
sential element. If he wants to reap the benefits 
of industrial democracy he must begin by being 
democratic: if he wants genuine co-operation, he 
must himself genuinely co-operate. In England 
the Whitley plan of workers' councils presup- 
poses complete organization of labour; and la- 
hour must never be expected to forego the full 
use of its one weapon of defence — organization 
and the strike — unless it is thoroughly convinced 
that capital and management is sincere in its 
proffers of co-operation and conciliation, and 
honestly proposes to introduce a greater degree 
of democracy in management. 

The Shop Council System as Applied to the 

Men's Clothing Industry of America and 

Canada — The History, Principles and 

Structure of the Development 

1C0ME now to what is undoubtedly the 
niost significant and comprehensive experi- 
ment, at present under way in America, 
in the introduction of a new co-operative and 
democratic relationship in industry. 

It has demonstrated its success in certain 
markets over a longer period than any other. 
It has operated in what was for years the most 
turbulent of all industries — the men's clothing 
trades. Here competition among employers 
was bitterest and most unscrupulous: here 
labour conditions were the worst; here in the 
ghettos and the tenement districts of New York 
and Chicago extreme radicalism found — and still 
finds — its toughest rootage. And yet out of 
this condition of industrial anarchy has de- 
veloped the beginning of a reign of law, founded 
upon a genuine spirit of co-operation. 

In the shops of Hart, Schaffner & Marx of ' 
Chicago, with 7,000 workmen, where the new 




idea has been tested out for over nine years — 
lasting through the strain of the war and 
through epidemics of labour disturbances in 
neighbouring clothing factories — there has never 
been a strike. On the other hand an immense 
and steady improvement has taken place not 
only in the living conditions, but in the spurit of 
responsible independence, the morale, the man- 
hood, of the workers; production per man (in 
that market, at least) has been rising: and fin- 
ally, the employers have been steadily pros- 
perous. As to the effect of the new system 
upon the consuming public I shall speak later. 

A plan, a system, a spirit, which will accom- 
plish all these results in a time of industrial un- 
rest is assuredly worth careful examination. 

In order to make the present situation per- 
fectly clear, let us recall for a moment the three 
stages through which the clothing industry in 
common, indeed, with others — has passed during 
recent years. 

1. The period of unrestricted competition 
among both employers and workers. I remem- 
ber well, many years ago, studying and writing 
about conditions in the garment trades. Cloth- 
ing was then made in dark holes in tenements — 
veritable "sweat shops" — ^by miserable and 
helpless foreigners who were driven to long 
hours of work at starvation wages by the un- 



regulated operation of the law of supply and 
demand. By subdivision of labour the system 
had stolen the skill of the craftsman and given 
nothing in return. It requires to-day fifty 
workers to make a pair of pants, and of tens 
of thousands of tailors very few could to-day 
make a coat, still less a suit of clothing. 

The whole industry had become a blind and 
greedy struggle for jobs among thousands of 
unskilled men. Employers were practically as j 
helpless as the workers : they were equally bound 
upon the wheel of cut-throat competition. Any 
one of them who tried to improve conditions was 
speedily forced to the wall by ruthless com- 

2. The second great stage represented the 
effort to escape from this hopeless condition of 
competitive anarchy by organization. Both sides 
in all branches of American industry began to 
combine, the employers in corporations, trusts, 
associations; the workers in labour unions. 
Where large capital was invested and extensive 
machinery was necessary — as in the steel in- 
dustry — anarchy often gave place to an autoc- 
racy of capital: with law and order imposed 
from above by a strong man or group of men. 
Judge Gary to-day is such an autocrat: and the 
United States Steel Corporation is an example 
of this stage of development. It has succeeded 


I' t 



by organizing capital and keeping the workers 
more or less disorganized. 

But this development was not possible in the 
clothing industry, because an employer could 
get into it with ahnost no capital at all. All 
that was needed was a loft, or even one room, a 
few sewing machines (or not any), and an 
ability to attract, dominate, or browbeat 

But if the employers in the clothing industry 
could not combine, the workers could and did. 
They began organizing by crafts, the more 
skilled men first, and there ensued a long and 
bitter w arfa re of strikes and lockouts. Unions 
were broken and defeated only to rise and fight 
again. The whole industry was kept in a con- 
dition of chaos. The United Garment Workers, 
affiliated with the American Federation of 
Labour, at one time became very powerful but 
not powerful enough to impose upon the in- 
dustry an autocracy of labour— equivalent to the 
autocracy of capital in the steel industry. For 
floods of new immigrants kept coming into the 
country bringing new labour competition, and 
requiring Herculean cWotIs on the part of the 
unions to educate them to the need of organiza- 
tion. And one of the fundamental ideas upon 
which unionism then rested— and it remains to- 
day an essential weakness of the American 



Federation of Labour — was craft organization, 
at a time when craft skill and craft lines were of 
steadily decreasing importance in many branches 
of industry. 

In the years from about 1908 until the out- 
break of the Great War (it was worst of all in 
New York — better, after 1911, in Chicago) 
the conditions in the clothing industry were 
all but intolerable. There were repeated and 
costly strikes and lockouts, a constant tendency 
on both sides to avoid livinff up to agreements, 
a steady decrease-j^^duction ^d efficiency. 
Neither side was strong enough to impose law 
and order in the industry. This is the unfortu- 
nate stage in which many great industries in 
America now find themselves. The coal-mining 
industry, for example, has recently reached an 
intolerable deadlock. 

8. We are now entering upon the great third 
stage of development. It is not surprising that 
it has come earliest in the clothing industry 
because, as I have shown, the conditions were 
such that both employers and workers became 
convinced that life was impossible in either of 
the other stages. 

Some wholly new method was necessary. 
Organize d hostil ity in industry had produced 
only chaos: what remained but to try co-opera- 
tion? Autocracy of capital in industry had not 


resulted in justice or in a reign of law; what 
remained but to try democracy? 

This is the great change, the right-about-face, 
implied in the present remarkable wave of ex- 
perimentation, which I have described in former 
chapters, with the new system of "shop com- 
mittees," " works councils," " trade boards." 

Two men, both in the same shop, one an em- 
ployer, one a worker, are mainly responsible for 
the beginnings of the new development in the 
garment trade. They were both men of vision 
and of practical courage. It is a very interest- 
ing story. The employer was Schaffner, of 
Hart, Schaffner & Marx. He had built up a 
large business in Chicago, he had retained in his 
workers a more than ordinarily close and benevo- 
lent interest. When the great strike of 1910 tied 
up his shops it nearly broke his heart. It seemed 
the height of ingratitude on the part of the 
workers. But unlike many employers who have to 
face this problem he did not become blindly angry 
and assume that he was all right and the workers 
all wrong-and that a stupid resort to force 
was the only solution. He asked himself what 
the trouble really was. He began to inquire 
into the whole subject of relationships between 
employers and workers. One thing he discov- 
ered immediately was that as his shops had 
grown larger, and machinery had been intro- 



duced, that the old personal relationship and 
personal understanding between him and his 
workers had become impossible. 

" The great trouble," he said, " is that I don't 
really know my own men. I don't really know 
what is going on in my own shops." 

If he did not know his men, it was important 
that he should know them. So he employed a 
man who was entirely outside of the industry 
and therefore not prejudiced, a man with a 
trained, scientific mind, to study the problem. 
This was Professor Earl Dean Howard of 
Northwestern University, probably the pioneer I 
labour manager — at least of the new type — ^in 
American industry. There are now over fifty 
such labour managers in the clothing trades 
alone, many of them formerly college professors. 
It was such an evident thing to do ! There were 
experts in advertising, experts in selling, experts 
in financing, experts in production — and no ex- 
perts at all in the most important factor of all 
in industry — labour. Goodwill in industry is 
not enough. Schaffner had had goodwill and his 
men had struck. There must, indeed be good- 
will, but it must be based upon accurate knowl- 
edge and a common understanding. 

This was the beginning of the new experiment 
upon the part of the employer. 

In the same shop there was a young Jewish 


m .ill 


clothing cutter named Si(|ney Hillman. He 
was at the time only twenty-four years old. He 
was born in Russia and came up through the 
narrow but thorough training of a rabbinical 
school. Like so many other restless young 
Russians he became an active revolutionary 
against the Czarist government. He was ar- 
rested before he was eighteen years old and 
thrown into prison where he spent his time read- 
ing every book upon economics and political 
science he could lay hands upon. When he 
got out of prison he left Russia, spent a year 
in Manchester, England, and then came to 
Chicago where he went to work in the plant of 
Sears, Roebuck & Co. and later in the shops of 
Hart, Schaffner & Marx. He had an ambition 
to be a lawj-er, but when the labour disturbances 
began he at once came into local leadership and 
was the principal agent on the part of the men 
in working out with the firm the remarkable new 
co-operative agreement which went into effect 
during the following year, 1911. 

At the time of this agreement the dominant 
union in the garment trades was the United 
Garment Workers which was affiliated with the 
American Federation of Labour. But many of 
the local organizations were discontented with 
the old craft unionism and the militaristic 
methods and leadership of the American Federa- 



tion of Labour. In the national convention of 
the United Garment Workers in 1913 the differ- 
ences came to a head and when a considerable 
number of delegates were denied seats they with- 
drew, held a rump convention of their own, 
formed a new organization called the Amalga- 
mated Clothing Workers, and elected Sidney 
Hillman their President, although he was not 
present at the convention. 

The principles upon which the new organiza- 
tion was founded were in brief as follows: 

1. To place less emphasis upon craft organi- 
zation and more upon a union of all the workers 
in the industry; to be as hospitable toward the 
unskilled as toward the skilled. 

2. To caroperate witli employers wherever 
possible rather than to fight them — but to fight 
and fight hard if necessary. They had before 
them the Hart, Schaffner & Marx agreement of 
1911 as a way of approach toward industrial 

Although excommunicated by the American 
Federation of Labour this new organization 
spread with extraordinary rapidity. To-day it 
has a membership of some 200,000 and prac- 
tically dominates the workers in the men's 
garment trades (except for certain shops chiefly 
making overalls which are still affiliated with the 
old United Garment Workers) of America and 





Canada. It is one of the most powerful unions 
in the country; it publishes its paper in seven 
languages; it conducts interesting welfare and 
educational work; it is planning large office 
buildings for its use (one to cost a miUion dol- 
lars) in New York and Chicago; it is projecting 
co-operative enterprises of several kinds; it was 
rich enough to send a check for $100,000 to the 
steel workers in their recent strike. It has suc- 
ceeded in binding together in a close union 
workers of a dozen different nationalities and 
races, chiefly Jews, Italians, Poles, Bohemians, 
but including many old-stock Americans, Scotch, 
English. Scandinavians and others. 

The essential element in the Hart. Schaffner 
& Marx agreement from which the entire de- 
velopment springs is also the fundamental idea 
found in the " shop committee " system that I 
•, have already described — that labour must be 
; represented "in managing those elements of 
1 industry which concern its own hfe. Therefore 
the Hart. Schaffner & Marx agreement pro- 
vides for the secret election by the workers in 
each shop of a " chairman." These chairmen, 
whVare. of course, union men. because the shops 
are firmly organized, elect five delegates to meet 
five representatives of the employees in a " trade 
board " where all questions that arise can be 
discussed upon an equal and democratic basis. 



This is in its essence the usual " shop coun- 
cils " system; but in the garment trades two 
very important new features have been intro- 
duced. One is the principle of continuous nego- 
tiation, with an agreement never to let a dif- 
ference of opinion reach the point of a strike. 
Instead of meeting occasionally and dealing at 
arm's length, these " trade boards " in Chicago 
are in session every day and any trouble that 
may arise is instantly dealt with. 

The other important feature is the " impar- 
tial chairman." He is the outsider who is chosen 
to preside over the trade board and to decide 
questions when a deadlock occurs between the 
five members representing the workers and the 
five members representing the employers. In 
short, there is not only continuous negotiation 
but continuous arb i t ration. Very able and 
broad-minded men, often college professors, 
have been chosen for impartial chairmen and 
arbitrators. At present Professor James H. 
JTufts of Chicago University is chairman^of the 
Board of Arbitration in the Chicago market. 

So much lies in the spirit of approach to these 
new methods that every one who is really inter- 
ested ought to read the following four extracts 
(written by J. E. Williams, now deceased, the 
first chairman of the Board of Arbitration, and 
one of the real creators of the movement) from 



the preamble of the agreement — which are in 
their way a setting forth of the basic principles 
for a new constitution for industry, which is 
now in the making: 

On the part of the employer it is the intention and ex- 
pectation that this compact of peace will result in the 
establishment and maintenance of a high order of discipline 
and efficiency by the willing co-operation of union and 
workers rather than by the old method of surveillance and 
coercion; that by the exercise of this discipline all stop- 
pages and interruptions of work, and all wilful violations 
of rules will cease; that good standards of workmanship 
and conduct will be maintained and a proper quantity, 
quality and cost of production will be assured ; and that out 
of its operation will issue such co-operation and goodwill 
between employers, foremen, union and workers as will pre- 
vent misunderstanding and friction and make for good 
team-work, good business, mutual advantage and mutual, 

On the part of the union it is the intention and expecta- 
tion that this compact will, with the co-operation of the em- 
ployer, operate in such a way as to maintain, strengthen, 
and solidify its organization, so that it may be strong 
enough, and efficient enough to co-operate as contemplated 
in the preceding paragraph ; and also that it may be strong 
enough to command the respect of the employer without 
being forced to resort to militant or unfriendly measures. 

On the part of the workers it is the intention and ex- 
pectation that they pass from the status of wage servants, 
with no claim on the employer save his economic need, to 
that of self-respecting parties to an agreement which they 
have had an equal part with him in making; that this status 



gives them an assurance of fair and just treatment and 
protects them against injustice or oppression of those who 
may have been placed in authority over them; that they will 
have recourse to a court, in the creation of which their votes 
were equally potent with that of the employer, in which all 
their grievances may be heard, and all their claims adjudi- 
cated ; that all changes during the life of the pact shall be 
subject to the approval of an impartial tribunal, and that 
wages and working conditions shall not fall below the level 
provided for in the agreement. 

The parties to this pact realize that the interests sought 
to be reconciled herein will tend to pull apart, but they 
enter it in the faith that by the exercise of the co-operative 
and constructive spirit it will be possible to bring and keep 
them together. This will involve as an indispensable pre- 
requisite the total suppression of the militant spirit by both 
parties and the development of reason instead of force as 
the rule of action. 

The new arrangement in the Hart, Schaflfner 
& Marx shops though at first regarded by many 
employers with great suspicion and scepticism, 
worked so well that it has now spread until it 
covers the entire industry in America. 

In each of the great markets — Chicago, New 
York, Rochester, Baltimore— there are " market 
boards " in which the organized employers meet 
the organized workers to discuss and settle prob- 
lems that concern the wider interests that arise 
in the entire market. Last July, 1919, another 
great step forward was taken: the employers of 
the entire country organized a National Federa- 


tion to meet upon an equal basis the national 
union of the workers and to establish a national 
joint board which should be in effect a govern- 
ment for the entire trade in America and 
Canada — establishing law and order for the 
whole industry. This has just begun to func- 

In this chapter I have sketched all too briefly 
the interesting history of this new movement, set 
forth the principles upon which it is based, and 
outlined the structure of its organization. In the 
next chapter I shall examine the development 
critically. How has it affected the worker, how 
the employer, how the public? What are its 
defects and limitations, if any? 

L/xlilx X Hixt JV.V1 

A Critical Examination of the Shop Coun- 
cil System in the Clothing Industry 
— How Does it Really Work? — 
What are its Excellences 
and Limitations? 

READ this acute description of the pres- 
ent condition of American industry: 
"A chronic state of civil warfare — 
with the classes perpetually struggling for ad- 
vantage — with small consideration for the public 

Signs of emergence from this intolerable con- 
dition are now beginning to appear — ^here and 
there a factory flies the flag of the new republic, 
here and there a shop or a mill, but only one 
great national industry, thus far, has risen into 
the new reign of law, established anything like a 
stable or orderly government. 

I described in my last chapter the representa- 
tive system of government in the men's clothing 
trades of America, where we have both em- 
ployers and workers organized and the rudi- 
ments of legislative, judicial and administrative 
machinery well established. 



h i 


Some 4,000 employers in these trades, mostly 
in New York, Chicago, Rochester and Balti- 
more, Boston, Montreal and Toronto, with an 
enormous investment of capital, employing 200,- 
000 workers, are now living under and within 
this new government — not all happily yet, hut 
with better order and better conditions than ever 
existed before. It is the purpose of this chap- 
ter to consider the new system critically. How 
does it really work? What is its effect upon the 
employer, the workers, the public? 

The best evidence of the success or failure of 
a government is to be found in the testimony of 
the people who live under it. 

In the factory where the new government has 
had its longest and severest trial — over nine 
years without a strike — the employers, Jlart^^ 
Schaffner k Marx, have this to say: 

" In our own business, employing thousands 
of persons, some of them newly arrived in this 
country, some of them in opposition to the whole 
wage system, hostile to employers as a class, we 
have observed astonishing changes in their atti- 
tude under the influence of our labour arrange- 
ments. Many seem to understand that they car 
rely upon the promises made to them by the 
company, and that all disputes will be finally 
adjusted according to just principles interpreted 
by wise arbitrators." 



These employers find that the unexpected and 
indirect advantages of the new system are as re- 
markable as the direct advantages. 

" Not the least of the advantages we have de- 
rived from our system is the reaction of the ideas 
and ideals, first applied in the labour depart- 
ment, upon the other departments, and particu- 
larly upon the executive staff of the manufac- 
turing department. Inefiicient methods of fore- 
men, lack of watchful supervision, and inac- 
curate information as to prevailing conditions on 
the part of higher executives, these could not 
long survive when every complaint brought 
by a workman was thoroughly investigated 
and the root-cause of the trouble brought to 

I had much the same conclusions from Samuel 
Weill, who is at the head of the Stein-Bloch 
Company of Rochester, another large manu- 
facturer of clothing. He is thoroughly con- 
vinced of the value of orderly government in 
industry, with the workers assuming their proper 
share in the management. 

" By letting the worker have what he is en- 
titled to, we protect and guarantee what we are 
entitled to," he says: "we cannot get security 
unless we give it." 

This is inside testimony from employers who 
have been working under the new system, and 


have found it profitable both in money and 
in satisfaction. 

It is significant, also, that in markets like 
Chicago, where the system has been in operation 
longest, the testimony is most unequivocal. In 
the New York market, where its acceptance 
is recent, there is still much doubt and scepti- 

New York is a market where competition 
among some 2,000 small manufacturers and con- 
tractors is still fierce. They have indeed got 
together in a strong organization with a labour- 
manager, Major B. H. Gitchell, representing 
them, but when confronted by the shortage of 
labour, which now exists, and a strong labour 
union, it is difficult indeed to keep them in line. 
The less responsible among them secretly break 
over the agreements and bid up on wages. At 
the same time some of the lesser officials of the 
labour union, who have not become fully imbued 
with the new spirit, and who feel their power, 
make unreasonable and autocratic demands. I 
found employers in New York who told me that 
conditions had never been worse — and yet they 
are maintaining their organization and the 
machinery of adjustment and conciliation. 

"We employers are mostly to blame: we 
aren't as willing to sacrifice for the common 
good as the workers," one employer said to me. 



" but we'd be far worse off than we are, if wt 
hadn't the new system of control." 

Indeed, one who gets down into the new 
movement is astonished sometimes that it can 
exist at all. Selfish competitive interests are still 
so strong on both sides, the social spirit still so 
weak, that it requires immense patience, steadi- 
ness, perseverance, to keep the new spirit alive 
and the new machinery in operation. On the 
employers' side there is always a reactionary 
group that will not " play the game," or sacrifice 
any present profit for future security and pros- 
perity. And if the employers find their reac- 
tionaries a problem, the workers find their radi- 
cals an equally difiicult one. The chief struggle 
of the far-sighted leadership among the Amal- 
gamated Clothing Workers is to keep in line the 
impatient extremists who are not satisfied with 
steady growth, but want the millennium by to- 
morrow afternoon. 

No one who examines these movements care- 
fully can doubt that the greatest of all forces in 
controlling and moderating "radicalism among 
the workers is not stupid force applied from 
the outside, but public opinion developed from 
within, through vigorous labour organizations. 

To see the labour managers on one side and 
the labour leaders on the other dealing day after 
day with these inflammable human elements in 

»* ! t 



industry, trying to give to short-sighted selfish- 
ness a little wider vision, trying to mitigate com- 
petitive ferocity with a touch of the spirit of co- 
operative understanding, trying to get into the 
dull brain of prejudice some little glimpses of 
the problem of the other man, is not only to 
appreciate the immense difiiculty of the problems 
involved, but to be filled with admiration for the 
determined idealism, the . patience, the faith, of 
these leaders, and to wonder that they have got 
as far toward a new reign of law as they have. 
When I think of the many men, both employers 
and workers, who stand on the side lines and 
agitate and denounce and threaten, who have 
theories and dogmas which they want apphed 
over night, who demand that the government 
settle instantly difficulties which they are too 
cowardly or too inert to settle themselves, my 
admiration for these men who are patiently 
playing the great creative game on the inside 
is immeasurably increased. 

The establishment of a new reign of law 
means, of course, new methods of discipline. 
Ability to secure disciphne is the test of any 
government. I went with an employer in New 
York into one of his shops where there were 
only a few men at work. He explained why: 

"We had a bad labour chairman here: and 
the men got so obstreperous that we could no 



longer stand it. Under their agreement they 
could not strike, but they could commit a kind 
of sabotage by refusing to produce. Well, we 
entered into negotiations with the higher imion 
officials, who investigated and found that we 
were right, and with their sanction we discharged 
every man in the shop : and are now building up 
a new force. Under the old system if we had 
discharged the entire force of a shop, it would 
have caused a general strike and no end of 
trouble: but we had the disciplinary power of 
the union behind us." 

T?Eis power of joint discipline is an important 
element in the new agreement. Both sides can 
be, and are, compelled to obey the law. 

"The company's officials,'* says Section VII 
of the agreement, " are subjec t to th e law as are 
the workers and equal ly res ponsible for loyalty 
in word and deed and are subject to discipline if 
found ffuilty of violation. ... If any^worker 
shall wOfully violate the spirit of the agreement 
by intentional opposition to its fundamental pur- 
poses (and especially if he carry such wilful 
Violation into action by striking and inciting 
others to strike or stop work during working 
hours) he shaU, if the charge is proven, be sub- 
ject to suspension, discharge or fine. ... If 
any foreman, superintendent or agent of the 
company shall wilfully violate the "spirit of this 





agreement and especially if he fails to observe 
and carry out any decision of the TradeBoard 
or Board of Arbitration he shall, if theliarge 
is proven, be subject to a fine of not less than 
$10 or more than $100 for each offence." 
This matter of discipline is, of course, a key- 
1 stone of the new movement. It is one of the 
elements which has made expert labour mana- 
gers so necessary to employers: men expert in 
dealing with the workers and with the union 
leaders. Much wisdom is already growing up 
out of these agreements. Consider this para- 
graph upon discipline by Professor Earl Dean 
Howard, labour manager for Hart, Schaffner 
& Marx: 

" So long as the offending employee is to be 
retained in the factory, any disciplinary penalty 
must be corrective and no more severe than is 
necessary to accomplish the best results for all 
concerned. Most offenders are victims of wrong 
ideals or mental deficiencies, the remedy for 
which is not punishment but help and instruc- 
tion. Delinquencies in management can fre- 
quently be discovered and the manager or other 
executive may need the services of the expert 
discipline officer quite as much as the original 
offender. The efficiency of the discipline officer 
should be measured by the proportion of ex- 
oflfenders who have ultimately become compe- 



tent and loyal friends of the company. It is his 
prime duty to prevent and remove from the 
minds of the people all sense of injustice in their 
relations with the employer, which is the funda- 
mental cause of the bitterest industrial conflicts." 

Another most important test of the new sys- 
tem is this : does it get results in added produc- 
tion? This is the question that not only the 
employers, but the public, will anxiously ask. 

Well, industry is now learning, after hard ex- 
perience, that production is due far more to the 
spirit of the shop, to goodwill, than to any other 
single factor. It cannot be secured for long 
by coercion, nor do high wages necessarily as- 
sure it. Whatever makes for more of the co- 
operative and democratic spirit in the shop, in- 
variably makes for more production. The ratio 
is exact. The old spirit of civil war, antagonism, 
and hostility is deep-seated and hard to eradi- 
cate : therefore, the change from inefficiency and 
low production to higher production is slow. 
The turn has actually come in Chicago, where 
the new government is well entrenched: it can- 
not be said, yet, to have come in New York, 
where the system is still new. Under the old 
"sweat-shop" conditions high production was 
forced by actual coercion: and the rebound has 
been to the other extreme. And yet even in 
New York, both employers and workers are 



beginmng to turn their attention seriously to the 
matter of more and better production. Last 
June the Cutters Union, in an agreement, ac- 
I cepted the principle of joint responsibility for 
I production and steady emEloymentTln Augurt 
thTbTee-pants workeS^de a similar agree- 
ment. In one shop where there had beS a 
sharp drop in production following the introduc- 
tion of week-work instead of piece-work, joint 
conferences were held between employers and 
workers. It was explained to the workers that 
low production in New York meant that trade 
would be seized by the more efficient markets of 
Chicago and Rochester, and that for the good 
of all, production must be kept high. The whole 
matter was discussed by the workers with the 
result that there was immediate and decided im- 

As to the public interest in production, the 
new agreement in the clothing trades is an im- 
portant element in keeping down the price of 
clothes. Continuous production, as contrasted 
with the old wastefulness of strikes and shut- 
downs, is a real service to the public: for what- 
ever the issue of a strike, it is the public that in 
the long run pays the bills for idleness. In a 
recent award as arbitrator at Chicago, Professor 
James H. Tufts said: 

" The social and public value of an orderly, 



peaceful method of negotiation and arbitration 
for wage adjustments (and all other disputes 
between employers and employed) cannot be 
gainsaid. This industry, as now organized under 
agreements which aim to substitute reason for 
force, is performing an important public service. 
Both the firms and the union members have 
made certain financial sacrifices for the sake 
of a larger end. The labour market is being 
stabilized: goodwill is being cultivated: respon- 
sibility is being built up." 

Yet there is a real danger to the public in- 
herent in this new movement, which the critic 
must recognize. When the whole industry be- 
comes thoroughly organized, the employers on 
one side, the workers on the other, and disci- 
phned under an industrial government of their 
own, there is the danger that they will use their 
power to raise prices and enrich themselves 
at the expense of the people who must buy 
clothing. I have argued this point many times 
with men on both sides. They answer that their 
arbitrators are far-sighted, impartial men of 
high standing, who will help to watch the public 
interest, and that they themselves are wise 
enough to see that very high prices tend to cur- 
tail consumption: and therefore reduce the in- 
come to the industry. These are all, indeed, 
drags upon the tendency of a powerful and 





united industry to force up its profits unduly: 
but unchecked power of this sort is still danger- 
ous. It is at this point, probably, that the 
United States Government will have to play an 
important part. At present there are no such 
things as standards in any industry. We don't 

*-' ..„...,«— ■■■r- " i» 1 • • 

know whatTirrthe proper standards^gljiving: 
or what should be the relationships of wages to 
cost of living. We don't know, by scientific 
tests," what should constitute a day's work in any 
industry: either in hours or in production. Here 
is a vast field for thorough and impartial ex- 
amination, and a new kind of publicity: and the 
United States Government is the only agency 
that can properly undertake it. 

Whenever I have spoken of this new system to 
employers in other industries, two questions are 
nearly always forthcoming. How about union- 
ism? How do they get rid of bad labour 

In this industry, they have the open shop, the 
closed shop and the preferential shop: all three 
kinds: but the question, once the new spirit of 
co-operation develops, curiously becomes one of 
minor importance. In^Chicago they agree to 
neither an open shop, nor a closed shop, but 
have a preferential shop. That is, preference is 
given to the union man in both hiring and laying 
off. But with a thoroughly responsible union 



the whole matter takes care of itself. As to the \ 
irresponsible or grafting labour leader, he simply i 
cannot thrive in this atmosphere of constant co- J 
operation and goodwill. Your bad labour 
leader fattens on civil war in industry: he plays 
upon the fears and cupidities of both sides. In 
the New York market, recently, several minor 
leaders were accused of dishonest practices, tried 
by the union itself, and not only deprived of their 
ofiices, but in three cases expelled from the 
union. Hart, S chaff ner & Marx gives this testi- 

*' Much depends upon the leaders of the 
workers. We have had some experience with 
misinformed and self-seeking men who secured 
temporary influence over our people, but some- 
how they failed to thrive in the atmosphere of 
our agreement." 

As to the workers under the agreement, the 
change from the " sweat-shop " conditions of a 
few years ago is little short of miraculous. They 
now have a forty-four hour week throughout the 
industry and wages that bring them well up to 
the American standard of living. They have 
gained in morale and in responsibility through 
self-expression in their unions. The social spirit 
is strong among them, and is beginning to ex- 
hibit itself in all sorts of new projects, such as 
co-operative enterprises, educational and amuse- 

7 f 



ment associations, naturalization and American- 
ization work, mutual-aid organizations, and so 
on. There is a world of social education and 
discipline yet to be gained, but the beginnings 
have been made. 

I have feared all along the temptation to be 
over-sanguine about this remarkable new move- 
ment, as well as the less developed shop-com- 
mittee systems which I have described in former 
chapters. It must be said in all fairness, that the 
great test of these new experiments is yet to 
come. They have come into being on a rising 
market and during a shortage of labour. What 
will happen when there is a falling market, or 
"hard times "-when there is again a surplus 
of labour? Or, what will happen if the immi- 
eration of f oreiim labour again inundates us and 
brings new competition into the labour market? 
We must face these questions. 

I found the leaders on both sides in the cloth- 
ing industry very certain that they could weather 
the storm. 

"There is no other alternative," said one: 
"if we don't hang together, we hang sepa- 
rately. The only alternative is anarchy and 
chaos: we have got to maintain organization and 
a reign of law, or we all go down together." 

And it is a fact, also, that in both Great 
Britain and Germany industry is seeking these 



new co-operative arrangements as the only way 
of escape. Far-sighted and wise men on both 
sides see in some approach toward industrial 
democracy the inevitable next step. 

No, we cannot be sure that this particular 
mechanism will work. All we can ever know, 
for a certainty, about any complex problem in 
life is the rectitude of our spirit in approaching 
it. In these new movements, however faltering, 
we discover, it seems clear to me, a genuine effort 
toward more co-operation, more goodwill, more 
democracy, an honest though difficult struggle to 
emerge from anarchy into organization and a 
reign of law. This eflFort, this struggle, at its 
core, is sound ; it is based upon the eternal veri- 
ties. We must have faith in it. 


Foundations of the New Co-opekative Move- 
ment IN Industry— The New Professor of 
Management, and the Labour Manager 

TO many people the new " shop council " 
and co-operative plans for dealing with 
the problems of labour seem like a revo- 
lutionary innovation— a transformation too sud- 
den to be sound. As a matter of fact the 
preparation which preceded the introduction of 
the new system, while quiet, has been substantial 
and thorough. The changes appear sudden in 
many cases because they were precipitated, per- 
haps a little before industry in general was quite 
ready to accept them, by the exigencies of the 
war and of reconstruction. 

In this chapter I wish to give some glimpses 
of the background of the new movement— show 
something of the preparation for it. A move- 
ment which finds such swift acceptance in the 
three principal industrial nations of the world- 
Great Britain, Germany and the United States 
— ^must have behind it a solid body of conviction. 

We have been accustomed in the past to con- 
sider only three groups as vitally concerned in 



industry: the employer-capitalist: the worker: 
the public. But very quietly, in the last fifteen 
years, a fourth group has been rising in impor- 
tance—especially in large industries of all kinds. 
The members of this group do not belong 
strictly to the employer-class, nor yet to the 
working-class, nor do they stand aside like the 
public. They belong to the new profession of 
management: they are the experts in scientific 
production or the experts in dealing with 

As long as industry was small and the rela- 
tionship between employer and worker was close 
and personal, the labour question was of rela- 
tive unimportance: but with the growth of 
great industry, the owner-employer was sepa- 
rated farther and farther jfrom the actual func- 
tions of management. There crept in managers, 
superintendents, foremen, as connecting links 
between the owner and the worker. As time 
passed these men have grown more and more 
important to industry: for it is upon their skill, 
knowledge, tact, that the prosperity of the shop 
or mill really rests. In most of the greater in- 
dustries in America to-day the owner-employer- 
capitalist lives in some more or less distant city: 
he handles problems of financing, salesmanship, 
advertising, and leaves the actual operation of 
the mill or factory largely to the managers. 


These managers are thus men not primarily 
interested in profits— for they do not often get 
any of the profits they make— but in production, 
in efficiency, in the process itself: so they have 
begun, more and more, to develop a professional 
spirit toward their work. Perhaps no recent 
movement in our educational life has been more 
notable than the rapid development of schools 
of business engineering, schools in which the 
prmciples of management are studied and 
taught. Many of the great universities and 
technical colleges— Harvard, Dartmouth, Wis- 
consin, Chicago, Illinois, New York and others 
specialize in these lines. Drexel Institute in 
Philadelphia, for example, maintains a school 
especially for training foremen. 

A great new impetus toward a professional 
rather than a mere profit-making attitude 
toward industry was given by F. W. Taylor a 
dozen years ago in his campaign for scientific 
management. Other movements like the study 
of safety-engineering, profit-sharing, vocational 
guidance, the sanitation and housing of workers, 
the development of psychological tests for em^ 
ployment, the whole great trend toward voca- 
tional and technical education, have all helped in 
stimulating this new professional spirit. 

Managenient is thus coming to rank as a pro- 
fession, as Webster's dictionary well defines the 



term : " a calling in which a man uses his knowl- 
edge for instructing, guiding or advising others 
or of serving them in some art." Here the 
ideas of education and service, not of profit, 
come uppermost and this is the true attitude of 
the new profession. 

I speak of this broad development, which is now 
firmly entrenched in America, with its regular 
publications, its societies and organizations, in 
order to make clearer the relative place of the 
labour manager, and labour management, which, 
as a newer part of the general movement, is com- 
ing to occupy a most important place in our in- 
dustrial life. 

As an indication of the extent of the develop- 
ment, the annual convention of the new Na- 
tional Association of Labour managers held last 
May (1919) at Cleveland was attended by 1,006 
delegates from every section of the country. It 
was so large a gathering that two banquets had 
to be held to accommodate all the members. 

The significance of this new movement can 
hardly be exaggerated: for it means a right- 
about-face in the attitude of our industries 
toward labour. From being the least considered 
of the elements that enter into production it be- 
comes the most considered. 

A. H. Young, the labour manager for the 
International Harvester Company, one of the 



pioneers in the movement, speaks of the mem- 
bers of the new profession as " pioneers in a new 
«r» in industry." He refers to the series of 
revolutionary changes in our industrial life in 
the last half-century: the steam-engine and 
power development: new methods of trans- 
portation and communication: the perfection of 
automatic tools: and the consolidation of busi- 
ness organization. 

"And at last," he says, "has come this be- 
lated concentration of thought and effort upon 
the human machine. ... Our function is to 
nurture this new interest in human well-being; 
to show the foremen, the workers, the officers, 
the owners, the truly wonderful fruits of mutual 
service; to stimulate their effort in its develop- 
ment; to seek constantly for and apply new 
truths; and to note as our reward not that 
which we have done, but the result accomplished 
by all." 

The new co-operative spirit is strong in all 
of these men. 

" The whole movement," says Dudley Kennedy, 
personnel manager at the Hog Island shipyards, 
^ IS an attempt to get back the old spirit of 
' cameraderie ' that prevailed when the owner 
was personally known and truly appreciated by 
every one of his employees . . . an attempt to 
return to something like the old relationship 


when the employer and his employees were real 
co-operating friends." 

The new profession is so interesting that it 
has drawn into it a very high class of men with 
high purposes. In the clothing industry, of 
which I have already spoken, many of the labour 
managers were formerly college professors; in 
one case I know the labour manager was 
formerly a minister: and most of them are men 
who can approach the difficult new problems in 
a broad scientific and sympathetic spirit. A 
labour representative of one of the great indus- 
tries of America thus describes the new pro- 

" Many successful employment managers have 
had little or no ' practical ' experience. These 
men possess ahnost a sixth sense which is a 
composite of a large measure of horse sense, a 
generous dose of the milk of human kindness, 
great sympathy, tact, diplomacy, and finaUy, an 
unwavering belief in the cause espoused, coupled 
with absolute honesty of purpose. The workers 
are about the hardest people in the world to 
fool. Mummery, stage-business, forms, mechan- 
ics or technique, will not produce happy rela- 
tions between the employer and employees in a 
plant where they are set up in lieu of personality 
and honesty of intent to serve." 
The primary purpose of the labour manager 


is to understand the workers' point of view so 
thoroughly and so sympathetically that he can 
present it strongly and clearly to the manage- 
ment. In the clothing trades, where the develop- 
ment is probably the most advanced, the work of 
dealing with the labour leaders is an important 
one (and the labour leaders here co-operate per- 
fectly with the labour managers) : and in some 
industries the labour manager has become so 
essential an element that he has been taken into 
the management as a vice-president or other 
oflScial upon an equal basis with the other three 
great departments of industry: production, 
finance and sales. 

The labour manager also plays an important 
part in all of the activities connected with safety, 
sanitation, housing and in general welfare 
work. I spoke in another chapter of the hos- 
tility of workmen in the steel industry to wel- 
fare work— they even call it " hell-fare " work, 
because they think it an effort to substitute 
trivial favours for essential justice. There was 
no such feeling in times when industry was small 
and employer and worker were close together: 
for then a gift from the employer to the men 
could be understood on both sides. Under the 
labour manager there can be again a proper 
approach to welfare work. Here is the word 
of the managers of one large factory: 



One of the most important functions of onr labour de- 
partment is welfare work — giving advice and material as- 
sistance to unfortunate employees, improving the working 
conditions in the shops, maintaining rest rooms and librar- 
ies, etc., — ^but this is not done for the purpose of more 
easily depriving the workers of their right to be repre- 
sented in all matters to which their interests are involved. 
Working men are quick to resent the substitution of favours 
for justice. Welfare work, however, in connection with 
general fair dealing is very effective in securing goodwill, 
especially if it increases the personal contact between the 
officials of the company and the employees. 

Yet I do not wish to imply that the ppthway 
of the labour manager is " roses all the way." 
Far from it. Often the employer does not more 
than half believe that he is worth his salt. Fore- 
men, superintendents and other production offi- 
cials find it hard, as William M. Leiserson, of 
Rochester, one of the most experienced of labour 
experts, has testified, "to give up their tradi- 
tional authority to what they consider imprac- 
tical young men with new-fangled notions of 
kindness and consideration in the treatment of 

No, the old system dies hard! 

Enterprises where the labour manager has 
been introduced, and where the new co-operative 
spirit has begun to express itself, find immedi- 
ate results in increased production, says Morris 


L. Cooke, one of the foremost of American 
efficiency engineers: 

" Permanent success in increasing produc- 
tiveness is invariably accompanied by an inten- 
sive cultivation of the personnel problem. The 
manufacturing plant seeking increased output 
should have as its purpose ' the highest develop- 
ment — mental, moral and spiritual — of each and 
every person connected with the organization/ " 

One of the greatest causes of inefficiency in 
industry is a high labour turn-over: and the kind 
of sabotage in which the workers hold back on 
production. The labour manager who devotes 
his whole time to the study of these problems 
and to ways for curing them, has been found to 
be of the greatest service. 

In fact, the increased efficiency resulting from 
a genuine effort to study the personnel prob- 
lems in a shop or mill is so evident that many 
employers have introduced the system with the 
idea that it will solve all the problems of labour. 
But it is no cure-all. It is only the beginning 
of the long process of co-operation: the begin- 
ning of a new relationship: and unless the em- 
ployer is willing to go forward with the intro- 
duction of more democratic methods of manage- 
ment throughout, he wiU not for long reap the 
rewards of the new experiment. 

Specialization in labour management is of no 



sporadic growth, nor does it represent mere 
ideaUstic experimentation: it is now firmly 
rooted in many branches of American industry. 
Among the membership of the new National 
Association of employment managers are repre- 
sented many of the most progressive industries 
in America. The President is Philip J. Reilly 
of the Dennison Manufacturing Company, now 
connected with the Retail Research Association, 
the vice-president is John C. Bower of the 
Westinghouse Electric Company, the secretary 
is Mark M. Jones of the Thomas A. Edison 
Industries of Orange, N. J. 

Some industries are very cautious and have 
not gone far in trusting their labour managers, 
nor in introducing even the rudiments of the 
new co-operative spirit: in others the labour 
manager has become the most important official 
of the company. Of all the openings in industry 
to-day for able young men, especially those who 
are infused with something of the new spirit of 
social service and desire to go into business not 
for mere profit but because there is also a genu- 
ine opportunity to serve, none is more promising 
than the profession of labour manager. And the 
demand for experts in this line during the next 
few years will be extensive. 

It is this professional attitude toward in- 
dustry, with its new sense of the untapped re- 


sources of the human element in production, 
which gives one such confidence in the stability 
of the " shop-councils " movement, the new effort 
.to secure employees' representation, the new 
methods of co-operating with labour unions, and 
the whole trend toward more democracy in in- 
dustry. It is the best warrant that they will 
" stand the test of hard times." 

This movement, and the remarkable recent re- 
vival of interest of the labour organizations in 
co-operative trading enterprises among working 
men — ^such as stores — and even banks and fac- 
tories—are perhaps the most hopeful signs upon 
a rather gloomy industrial horizon. 

"We and all the nations perceive, as never 
before," says Professor John R. Commons in his 
book, "Industrial Good-will," "that the next 
stage in industrial progress is not that economic 
revolution which Karl Marx predicted, it is not 
even development in machinery and tools, but it 
is the increased production and increased wealth 
of the world which are now dependent upon the 
health, intelligence, goodwill of labour. That 
nation which is foremost in giving heed to the 
health and housing, the vocational education, 
security, and wages of its working people will 
be the nation which will survive even in time of 



Industrial Control — Some Results of 
THE New Co-operative Experiments 

IN this final chapter I wish to gather certain 
loose ends, and suggest certain general con- 

Boiled down, the present crisis in America — 
and for that matter in the world — represents a 
struggle to escape from the chaos of industrial 
warfare, with the waste and inefficiency which 
characterize war, into a new reign of law and 
order. " Law and order," however much the 
term may be abused, is to-day the passionate 
desire, the deep need, of the whole world. It is 
desired and needed in international affairs: still 
more desired and needed in the great field of 

Three methods are proposed for attaining 
law and order in industry. 

The first is that of the extreme conservatives 
like Judge Gary of the United States Steel 
Corporation, who would enforce law and order 
from above by virtue of maintaining a de- 
termined autocracy of capital. While power- 



fully organized themselves, employers who hold 
to this point of view use every device to keep 
labour disorganized. Judge Gary will neither 
meet nor deal with outside representatives of 
union labour, nor will he recognize organizations 
within his mills. 

If employers of this type are forced by the 
growing power of labour to deal with the unions 
it is in no real spirit of co-operation : they merely 
sign a truce, and the attitude on both sides re- 
mains one of suspicion and hostility which may at 
any moment flame up in open war (strikes, lock- 

The second method is that of the extreme 
radicals. An examination of the extreme radical 
movements among American workers will show 
that most of them have for their central purpose, 
however vaguely expressed, however veiled, the 
imposition of law and order upon industry 
through autocratic control by labour. They see 
only injustice, suppression, inefBciency, in the 
autocracy of capital— and they fly to the other 
extreme. " Labour must rule," is the slogan of 
revolutionary radicalism. Extreme conservatism 
thus breeds extreme radicalism: Czarism breeds 
Bolshevism. The exemplification of this ex- 
treme point of view is found in the " dictatorship 
of the proletariat" now existing in Russia. 
While the great masses of labom- in America 



to-day are not yet touched with this extreme 
spirit, nevertheless labour unions are growing 
now as never before : they are penetrating many 
industries formerly unorganized: like the steel 
mills and the textile industries. They have al- 
ready conquered the packing-house industries. 
They are going into politics as never before — 
with the successes of the Labour Party in 
England to cheer them on. They are undertak- 
ing with a fresh spirit of determination co-opera- 
tive enterprises designed to serve the sole needs 
of the workers. 

To any honest observer who surveys the de- 
velopment of the past twenty-five years it is 
clear that while they have lost battles the 
workers are winning the war. One need only 
recall as evidence of this advance the immense 
body of labour legislation passed during the last 
few years in America and the fact that labour 
is now represented in the President's cabinet; 
one need only recall the part which labour 
leaders played during the war: and, finally, the 
power exhibited recently by labour organizations 
in the steel and coal strikes and in the railroad 
controversy. While the masses of American 
labour may not subscribe to the outright pro- 
gram of the extreme radicals that " labour must 
rule," yet the whole drift of the labour move- 
ment is in that direction. 


The third method represents a vigorous rejec- 
tion of the whole idea of autocracy — either the 
blind and greedy autocracy of capital, or the 
rough autocracy of labour. A sturdy and 
wholesome voice is rising powerfully in America 
—not clear yet and rather angry, but full of 
vitality— that says: 

••A%l.g„e o'bolh yo„ h„„».. We will 
be bossed neither by Gary nor by Haywood: 
nor by the ideas they personify. Get together 
now and do your job! Give us production: give 
us clothes and coal and steel and food— and stop 
your fighting about it! » 

Out of this spirit, and out of the intolerable 
chaos which long-continued conditions of inci- 
pient civil war in industry have produced, has 
sprung the remarkable movement which I have 
already described, toward a new co-operative 
relationship between employers and workers: 
and 8 gradual substitution of democratic for 
autocratic control of industry. It represents a 
right-about-face: a new spirit, a new attitude. 
It is opposed by both extremes : both the old hard- 
set employer-class and the wilder radicals: but 
it is being accepted by the younger, more pro- 
gressive leaders among both employers and 
workers, and is spreading with great rapidity. 

To-day the two ideas-democracy versus au- 
tocracy — are struggling for mastery in Ameri- 



can industry: upon the issue hangs, to a large 
extent, the future welfare and progress of the 

The great need of a world that is short of 
clothing, food, housing, manufactm-ed materials 
of all kinds, is more production. 

The old autocratic method of control has 
been weighed in the balance and found want- 
ing as an agency for increasing production. 
It has been inefficient and wasteful to a 
degree that few people realize. Scientists in in- 
dustry have declared that our industrial plants 
are producing only about a quarter as much as 
they might produce, without a cent of additional 
capital, if methods of handling both machinery 
and personnel were perfected. Morale in in- 
dustry has dropped below zero. Autocratic em- 
ployers think sometimes that when they have 
prevented labour organization or held it back 
that they have prevented strikes and secured 
efficiency; but as a matter of fact they suffer 
continually from a kind of chronic disease of 
striking. Experienced men leave their jobs : and 
new and inefficient men have to be brought in 
and trained — a very expensive process. The 
"labour turn-over" to-day in American in- 
dustry is appalling: and labour turn-over is only 
a chronic phase of the disease of striking. It is 
as though a general were trying to fight a battle 


with half or two-thirds of his trained men desert- 
ing all the tune, with raw recruits taking their 
places! Another element of crass inefficiency 
is to be found in intermittent employment, as in 
the coal-mining industry; another in the want of 
any systematic effort to train and educate workers 
to do then* work well instead of carelessly. Of 
course, with labour changing all the time any 
systematic training is impossible. Under the 
old system no loyalty is developed, no team- 
spirit, no enthusiasm. 

Under the new plan of co-operative effort 
production increases with the new spirit of the 
shop. Team-play becomes as important to in- 
dustry as to baseball — team-play and sacrifice 
hittmg. And with honest co-operation, the 
worker will share in the rewards of the increased 
production resulting from common effort. Some 
form of profit-sharing eventually appears in 
industries where the new system is introduced: 
and this adds further stimulation to efficiency. 
The autocratic employer often complains bit- 
terly that the worker does not produce as much 
as he could. 

" Why should I? " asks the worker. " I get 
nothing out of it. None of the profit of added 
production comes to me. The employer takes it 

One of the questions that is always fired 



straight at the advocate of the new system by 
the employer who is still sceptical about it is 

" Now, that's all right in the clothing trades 
— or at Wappingers Falls — or in the Dennison 
Manufacturing Company — but it won't work 
with us " — and he begins to tell of his peculiar 
difliculties, and of how unusually ignorant his 
workers are, and how atrocious the labour 
leaders he has to deal with. Or he says that the 
owner of such-and-such a plant is rich and can 
afford to experiment. The trouble with many 
employers is that they want to be absolutely 
assured of success before they venture : and that 
isn't the way the world is built. 

Nevertheless it is a fact that a scheme which 
succeeds in one industry may fail in another. 
There is the hackneyed contrast between a 
water-power plant with an enormous investment 
of capital and a labour force of half a dozen 
men— and a laundry with little or no capital in- 
vested and a large number of workers. No 
mechanical plan can fit both cases. 

Industry is as various as life itself: wholly 
different groups of conditions present themselves, 
for example, in the building trades, in public 
service corporations like railroads, in government 
or municipal employment. Small-town and 
small factory conditions are wholly different 


from those in the great steel and textUe indus- 

No mere mechanism — especially no patent- 
panacea, and there are patent-panaceas in this 
department of life as in any other— will solve 
the problem. Everything depends upon the 
spirit of approach : the attitude of employer and 
worker: if there is a real desire for co-operation, 
a genuine wish to substitute a democratic for an 
autocratic point of view, the method will soon 
appear. Each situation must be studied for 
itself. It is a wholesome sign in America that 
we are taking hold of the problem in the Ameri- 
can way— experimentally, locally, with small 
respect for former experience and with httle 
attention to theories — a method which irritates 
some critics who want us to " think through " 
and to " have a program "—like the Germans or 
the British. The variety and enthusiasm of the 
experimentation in America seems to the ob- 
server a sign of health: we are going about it 
with the same spirit of inventiveness and in- 
geniousness — ^with the same disregard for gov- 
ernment commissions and government advice — 
which has always marked the most vigorous and 
original American development. 

One of the chief dangers now confronting the 
new movement is the evident effort upon the 
part of some employers to use the new device 



with the intent of forestalling the organization 
of labour. They put in th^ form of the system, 
perhaps call it " democracy," but have not the 
spirit by which it can reaUy be made to work. 
There is a type of employer, as H. F. J. Porter 
remarks, " who talks co-operation but wants 
the other fellow to do all the co-operating." No 
class of men are harder to fool than the workers: 
and many of them to-day are suspicious of the 
new system because they are not convinced that 
it is genuine. One of the demands of the steel 
workers in the recent strike was for *' abolition of 
company unions." There is danger in every 
case where the system is " put in " by the em- 
ployer, as he would put in a new machine, with- 
out encouraging a firm and independent organi- 
zation of the workers. There can be real co- 
operation only where the co-operators both have 
the sense of being free. Goodwill must be 
reciprocal: it can never be all on one side. I 
know of employers who have put in various 
forms of welfare work with a real intent to ex- 
press their goodwill and have been tragically 
disappointed when it evoked no return: but 
goodwill comes not out of gifts, but out of asso- 
ciation. It is for this reason that the best ex- 
ample of the development of the whole idea is 
in the men's clothing trades (as I have already 
described), in which both sides are firmly organ- 



ized: and approach each other face to face as 
up-standing equals. , 

There must also be open diplomacy between 
the co-operators: there is nothing that so allays 
suspicion and feeds the spirit of common effort 
as frankness in taking the workers into full con- 
fidence. In several industries in America repre- 
sentatives of labour now sit on the boards of 
directors and are fully informed of the entire 
state of the business. Real publicity— which 
is simple truth telling— would solve a large pro- 
portion of the ills the world now suffers from. 

One great value of the new system is that it 
must more and more set up standards of em- 
ployment—for once the old system under which 
labour was a purchasable commodity is shaken, 
new methods of determining standards of work, 
standards of living, standards of pay, must be 
devised. In the clothing industry research 
bureaus have abeady been established by both 
employers and workers and the work of investi- 
gation has begun: but probably most of this 
task will eventually have to be done by outside, 
impartial government agencies. 

Another important development— perhaps the 
most important of all— is the gradual upbuilding 
of a common law for industry, through the re- 
curring decisions of shop councils and boards of 
arbitration. Industrial democracy is thus emerg- 



ing just as did political democracy through a 
steady accretion of principles of control and 
adjustment: a veritable common law. . 

Dean J. H. Wigmore of the Northwestern 
University Law School, in commenting upon 
this growth of law in Jhe clothing trades of 
Chicago has this to say: 

The significant thing is that general principles are be- 
ginning to be formulated. And the moment you have gen- 
eral principles^ used for deciding particular cases^ you 
have justice in the form of law, as distinguished from the 
arbitrary justice of a Turkish caliph, or from private 
struggle decided by private force. 

Industrial controversy will become as justiciable as prop- 
erty controversy. And a new field will have been gained 
for systematic justice. 

Another tendency apparent in the new move- 
ment is a renewed interest in education. Just as 
a great wave of educational enthusiasm, which 
found its best expression in the common school 
system of America, followed the introduction of 
real political democracy, so a wave of a new 
kind of education is coming in with the ap- 
proach to industrial democracy. Autocracy 
thrives upon ignorance as it does to-day in the 
steel industry: but education is the very life- 
blood of democracy. In every case where the 
new system has been genuinely introduced there 
is a tremendous urge toward classes, clubs, 






schools. Both employers and workers are in- 
terested. The Amalgamated Clothing Workers 
have a regular department of education: and 
the shop school, or the training-class is a charac- 
teristic feature of these new movements. For 
with goodwill comes a new loyalty to the shop 
or mill: that new loyalty tends to reduce the 
labour turn-over and make for steadier employ- 
ment: and steadier employment means the 
opportunity and the encouragement for better 
training of the workers. I can only touch upon 
this important subject here: it deserves an entire 

One other point is of great importance: the 
support of public opinion in demanding that the 
two parties to the industrial warfare which is 
now paralysing our whole Ufe get together and 
stay together. The public must more and more 
keep in touch, not necessarily with the details 
of the problems involved, but with the general 
currents of progress. 

I received a rather impatient letter the other 
day from a correspondent who said he had read 
my presentation of some of the rather dis- 
couraging aspects of American industry. 

"What is the solution of the problem?" he 

Well, I felt like asking in return: 

"What is the solution of life?" 



For the labour problem is the greatest con- 
tinuing process of life. In it are involved the 
myriad human relationships under which men 
work together here upon the earth to produce 
food, clothing, shelter— and a few beautiful 
things — for themselves and their children. Is 
there any "solution" for that? 

The trouble is that men get tired and want 
things settled: they want a formula; or they 
find a warm and comfortable corner and hate 
to be disturbed in it. But life and the labour 
problem do not get tired: they go on! 

In another sense, there is a solution. It con- 
sists in the attitude, the spirit, which one main- 
tains toward the labour problem — an adventur- 
ous, inquiring, experimental attitude, ever hos- 
pitable toward new facts: and a generous and 
democratic spirit. I wonder if men can find 
this solution in its completeness without some 
high faith in God, and some vital interest in 
their fellowmen. 







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